Brent: Geopolitics keep prices elevated – Deutsche Bank

Deutsche Bank strategists note Brent Oil has rebounded above $100/bbl as markets reassess risks around the US-Iran ceasefire. Brent briefly dipped to $96/bbl but closed just over $100/bbl and is quoted near $101.64/bbl early Friday. They stress that despite higher prices, markets are still not pricing a worst-case scenario.

Oil reacts to Iran conflict headlines

"As we go to press this morning, markets have slipped back thanks to questions about whether the US-Iran ceasefire is holding. Indeed, there’s been a clear escalation in the last few hours, with the US striking targets in Iran after they fired on three US warships in the Strait of Hormuz. And in turn, Trump posted that “we’ll knock them out a lot harder, and a lot more violently, in the future, if they don’t get their Deal signed, FAST!” So Brent crude is back up +1.58% this morning to $101.64/bbl, having been beneath $100/bbl for a good chunk of yesterday’s session."

"Prior to all that, Brent crude (-1.19%) had posted a modest decline yesterday to $100.06/bbl, but that was a decent recovery from the intra-day lows of $96/bbl given there were no obvious signs of progress towards a deal. Moreover, as reports of explosions in Iran came through, that pushed oil prices even higher, so whilst Brent crude spent much of the day beneath $100/bbl, it was just above that mark by the close."

"If the Strait of Hormuz is closed for an extended period of time, it may well be that the next move might need to be up in interest rates."

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