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Crude Eases As Markets Don’t Expect An Escalation In The Middle East

OIL
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After a short-lived spike at the start of the session, oil prices are moderately lower today as fears of an escalation in the Middle East fade and a risk premium is also priced in. Energy markets are likely to continue to watch development closely though. WTI is down 0.3% to $85.45/bbl after a low of $84.88, and Brent -0.2% to $90.30 after falling briefly below $90 earlier to a low of $89.77. The USD index is slightly lower.

  • Iran said it has achieved its objective and also doesn’t want an escalation particularly with the US. The US has apparently warned Israel privately not to retaliate but war cabinet minister Gantz has said that it will “exact a price” when the time is right.
  • Shipping risks in the Middle East have risen with Iran seizing an Israeli cargo vessel in the Strait of Hormuz. The closure of the Strait is a key concern.
  • Geopolitical risks in the Middle East and Russia, key oil-producing regions, plus signs of increased demand in the US and China in addition to OPEC’s continued output cuts are driving consideration that crude will reach $100/bbl. Any second round effects from higher energy prices will be monitored closely by central banks.
  • Later the Fed’s Logan and Williams appear and March retail sales and April Empire manufacturing are released. The ECB’s Lane and BoE’s Breeden speak, and euro area February IP is released.
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After a short-lived spike at the start of the session, oil prices are moderately lower today as fears of an escalation in the Middle East fade and a risk premium is also priced in. Energy markets are likely to continue to watch development closely though. WTI is down 0.3% to $85.45/bbl after a low of $84.88, and Brent -0.2% to $90.30 after falling briefly below $90 earlier to a low of $89.77. The USD index is slightly lower.

  • Iran said it has achieved its objective and also doesn’t want an escalation particularly with the US. The US has apparently warned Israel privately not to retaliate but war cabinet minister Gantz has said that it will “exact a price” when the time is right.
  • Shipping risks in the Middle East have risen with Iran seizing an Israeli cargo vessel in the Strait of Hormuz. The closure of the Strait is a key concern.
  • Geopolitical risks in the Middle East and Russia, key oil-producing regions, plus signs of increased demand in the US and China in addition to OPEC’s continued output cuts are driving consideration that crude will reach $100/bbl. Any second round effects from higher energy prices will be monitored closely by central banks.
  • Later the Fed’s Logan and Williams appear and March retail sales and April Empire manufacturing are released. The ECB’s Lane and BoE’s Breeden speak, and euro area February IP is released.