Oil: prices slide on halted strikes – Commerzbank

Commerzbank strategists report that Brent Oil opened over 7% lower under USD84 into the Asian session after President Trump said the United States (US) would hold off on new strikes against Iran. Despite OPEC+ approving a modest output increase for September, the Strait of Hormuz remains effectively closed, keeping Persian Gulf export disruptions and inflation concerns in focus.

Trump decision hits Brent sharply

"The dominant story heading into the Asian open is that Brent oil prices have opened lower by over 7% to under USD84. This followed reports over the weekend that President Donald Trump said the US would hold off on new strikes against Iran. Iran and other Gulf nations indicated they are working toward a deal."

"President Trump posted on social media that he had agreed to cancel the attack “subject to being able to rapidly make a DEAL”, adding “Get to work, everybody, and get it DONE”. Saudi Arabian Crown Prince Mohammed bin Salman had reportedly urged Trump to refrain from further military action."

"On the energy front, OPEC+ approved a further increase of 188k barrels a day to collective output targets for September on Sunday, completing the theoretical unwinding of the 1.65mn barrels a day in voluntary cuts made in April 2023."

"The Strait of Hormuz remains effectively closed, continuing to disrupt Persian Gulf oil exports and stoking inflation concerns across Asia and Africa."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)