Oil rebounds as fragile Gulf ceasefire, constrained Hormuz keep supply risks elevated

Oil prices rose on Thursday as doubts over a fragile two-week Middle East ceasefire raised concerns that energy flows through the crucial Strait of Hormuz will remain restricted. Brent crude futures were up $1.96, or 2.07%, at $96.71 a barrel at 0325 GMT, while U.S. West Texas Intermediate (WTI) crude rose $2.60, or 2.75%, to $97.01 a barrel. Both benchmark prices fell below $100 per barrel in the previous trading session, with WTI recording its biggest decline since April 2020, on initial expectations for the ceasefire to result in a reopening of the strait. However, analysts said market participants are hesitant to fully unwind pricing for geopolitical risk, and there is no clarity on what negotiations between the U.S. and Iran would mean for oil flows. “The chances of a meaningful reopening (of the Strait of Hormuz) any time soon look dim,” said Vandana Hari, founder of oil market analysis provider Vanda Insights, predicting continued volatility in oil prices. “The futures market looks a bit broken,” she said. Otherwise, “prices should have snapped right back to pre-ceasefire levels by now.”
Reuters




Leave a Reply