By Vince Lanci, GoldFix
LONDON: Brent crude fell below $90 a barrel after President Trump said a ceasefire deal restoring energy flows through the Strait of Hormuz could be signed this weekend, unwinding part of the week’s escalation-driven risk premium.
The retreat capped a week that opened with renewed US strikes on Iran and closed with talk of a signing, analysts said in a daily commodities note, which observed that similar declarations have preceded resumed hostilities before but that the positive signals this time extend beyond Washington to other parties in the negotiations.
The assessment flagged one conspicuous silence: Tehran has said nothing, and the analysis cautioned that any agreement could prove fragile if nuclear talks fail to progress.
The assessment flagged one conspicuous silence: Tehran has said nothing, and the analysis cautioned that any agreement could prove fragile if nuclear talks fail to progress.
“We would be cautious about assuming that the extension of the ceasefire is a done deal,” the note said.
The report argued that the relatively benign price action of recent weeks masks the scale of supply disruptions from the Persian Gulf, and it identified late July as an inflection point at which depleted inventories and seasonally stronger demand would push prices toward $120-130 a barrel if flows have not resumed.
Separately, OPEC’s monthly oil market report showed the group’s production fell 177,000 barrels per day in May to 18.8 million barrels per day, led by a 546,000 barrel per day decline in Iran as the US blockade pressures its oil industry; the drop was partly offset by increases from Saudi Arabia, the UAE and Iraq, consistent with recent indications that more oil is moving through the strait.
Continues at GoldFix:
Separately, OPEC’s monthly oil market report showed the group’s production fell 177,000 barrels per day in May to 18.8 million barrels per day, led by a 546,000 barrel per day decline in Iran as the US blockade pressures its oil industry; the drop was partly offset by increases from Saudi Arabia, the UAE and Iraq, consistent with recent indications that more oil is moving through the strait.
Continues at GoldFix:
