Iranian Threat Premium Failing to Hold for Oil

Crude is retreating from the premium priced in Wednesday on headlines suggesting an “imminent” Iranian attack on Israel. Brent has slipped but is finding some support around the $90/bbl level at present.

• Crude faced weakness earlier in the week on demand uncertainty and building US crude stockpiles.
• A new round of negotiations between Israel and Hamas began this week but no agreement has been reached as US president Biden urged to bring back a six-week ceasefire in Gaza.
• Oil markets would rise “meaningfully higher” if the Strait of Hormuz is impacted by the rising tensions according to RBC Head of Commodity research Helima Croft earlier this week.
• Oil markets appear unclear what level of price premium to assign the tensions without any actual impact on production and exports from the current escalations.
• Brent JUN 24 down 0.6% at 89.98$/bbl
• WTI MAY 24 down 0.6% at 85.65$/bbl