Oil climbs as U.S. strikes Iran; analysts flag 'forever war' risk. Fed gets easing inflation room. Buffett warns on speculation. Kalshi sees 90% chance of $4 gas by July.
The U.S. conducted several rounds of strikes on Iran on Wednesday, pushing crude higher in Asian trading and reviving concerns that the conflict could drag on without a clean exit. Wall Street largely shrugged off the escalation. Major averages closed higher, lifted by Big Tech strength and a surprise drop in wholesale prices.
President Donald Trump said the pressure was working, telling reporters Iran now wants to meet. Analysts warned the hostilities risk a prolonged disruption to energy markets. "A forever war – a conflict that grinds on without a clean exit – is the real danger," one strategist said. "Energy markets would see extended disruption."
Oil was trading higher during Asia hours. Kalshi traders pushed the odds that U.S. gas prices cross $4 per gallon by the end of July to 90%, up from 56% in two days. The contract, verified by AAA, shows a 93% chance that prices top $4 and a 63% chance they exceed $4.10. The national average stood at $3.89 on Wednesday, about 3 cents above Tuesday's level.
Federal Reserve Chairman Kevin Warsh walked a tightrope in Senate testimony. He played up the economy and interest-rate resolve while fielding questions about his contacts with the Trump administration. Warsh said he meets "often" with the White House but insisted the central bank's decisions remain independent. On inflation, the data gave the Fed more room. Wholesale prices unexpectedly fell 0.3% in June, driven by a big drop in gasoline. Easing price pressures could allow the Fed to hold rates longer without tightening further. Geopolitical risk complicates that picture: a sustained oil spike would feed into consumer prices, narrowing the Fed's options.
Warren Buffett was critical of a stock market he said is increasingly driven by speculative trading. "It's tough to find values when everybody is preferring gambling," the Berkshire Hathaway chairman told CNBC. He said he was the one who initiated the conglomerate's recent big investment in Alphabet, not his successor, Greg Abel. Buffett's caution underscores the tension between the rally and the underlying geopolitical risk.
Kalshi contracts will settle against AAA's July gas-price data at month's end. The next scheduled catalyst for oil markets is Thursday's Starship test flight, though any further U.S. or Iranian military action would move crude faster than any launch.
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