Oil: Prices surge on Hormuz blockade threat – ING

Source Fxstreet

ING’s Ewa Manthey and Warren Patterson report that Oil markets rallied sharply after US-Iran talks collapsed, with ICE Brent jumping over 9% and NYMEX WTI moving above $105/bbl. The US plans a maritime blockade around Iranian ports, stoking supply fears. Positioning data show diverging speculative interest in Brent and WTI ahead of OPEC’s monthly report.

Oil rallies on US blockade threat

"Oil markets rallied sharply on Monday after US-Iran talks collapsed over the weekend. ICE Brent jumped more than 9% in early trade, while NYMEX WTI pushed above $105/bbl. In response, the US military plans to implement a blockade of all maritime traffic entering and exiting Iranian ports from 10:00am Monday Washington time, while allowing vessels not calling at Iranian ports to continue transiting Hormuz."

"European gas prices also surged. Front‑month TTF futures climbed nearly 18% to intraday highs above EUR51/MWh. The breakdown in peace talks has revived concerns over the conflict, now in its sixth week, while renewed US threats to block Hormuz have intensified fears of near‑term supply tightness."

"Positioning data points to growing uncertainty. Speculators reduced their net long in ICE Brent by 5,583 lots to 424,270 lots as of last Tuesday, driven by a 4,525‑lot fall in gross longs. By contrast, speculators increased their net long in NYMEX WTI by 7,121 lots over the week, taking it to 137,838 lots."

"US drilling activity remains subdued. Baker Hughes data shows the US oil rig count unchanged at 411 as of 10 April, as price volatility and weaker margins continue to weigh on investment. Total rigs fell by three to 545, leaving the count 38 rigs below year‑ago levels."

"Looking ahead, attention turns to OPEC’s monthly market report due later on Monday, which should provide updated guidance on supply balances amid the escalating geopolitical risks."

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

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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