Forever is a long time, don’t you think? Iran is saying that the door to diplomacy with the U.S. is gone forever, one day after President Donald Trump hit them with “hard-hitting” financial sanctions directly against Supreme Leader Ayatollah Ali Khamenei and his associates.

Most traders were amazed that President Trump, already sanctioning Iran hard, found something new to sanction other than pistachios. Iran is one of the world’s largest producer of pistachios, next to the United States, perhaps the real tension in this conflict.

Ok, maybe not but Iranian President Hassan Rouhani says President Trump’s sanctions are outrageous and stupid. As reported by the Wall Street Journal he asked why “Would any administration with a bit of wisdom [sanction] the highest authority of a country? And not only a political authority, a religious, social, spiritual one, and not the leader of Iran only, the leader of the Islamic revolution all over the world?” Mr. Rouhani said in a speech broadcast on state television.

He said it was “obvious” that the U.S. was lying about wanting to negotiate with Iran: “You want us to negotiate with you again?” Mr. Rouhani said, “and at the same time you seek to sanction the foreign minister too?”

Well President Trump already answered that question. He said that “Today's action follows a series of aggressive behaviors by the Iranian regime in recent weeks including shooting down a U.S. drone,” the president said in the Oval Office, calling Khamenei “responsible for the hostile conduct of the regime.”

Yet at the same time Iran seems like a country that wants to, no, needs to negotiate. Its economy is in a shamble and the regime will soon face unrest. It’s being backed into a corner and it will have to negotiate or perhaps enjoy the same fate the Venezuelan economy is now facing.

And crazy as it seems this is the most normal relations between the U.S. and Iran in weeks. Oil is taking out a bit of the risk premium, as the market hopes there are no more events. Events like shooting down drones or cyber-attacks or the occasional attack on oil tankers.

So, we can get to the real reason why oil is keeping its strength and that is strong U.S. demand and an accommodative Fed. We have a slew of Fed officials talking today, including the man himself, Fed Chair Jerome Powell, whom President Trump said he could fire “If I wanted to, but I have no plans to do anything.” Oil will want to get a sense whether Powell is going to confirm the July interest rate cut and if he does, we should get a nice risk-on trade pop.

We also will get our first look at this week’s petroleum inventory with the release from the American Petroleum Institute. Based on what we are seeing we should see draws across the board. Private intelligence services are calling for a drop in Cushing Oklahoma supplies.

Nat gas finally reversed. Summer may be on its way, finally. The heat may bring the missing summertime power generation.