Oil: Deal optimism drives sharp selloff – ING
ING strategists Warren Patterson and Ewa Manthey note that Oil prices, including ICE Brent, fell sharply on optimism over a potential US–Iran Middle East deal.
Strategists at ING, Warren Patterson and Ewa Manthey, express concern over sharp declines in oil prices, particularly ICE Brent, following optimism over a potential US-Iran Middle East deal. They caution that market reactions may be premature due to ongoing uncertainty, Iranian denials of negotiations, and heightened security risks in the Strait of Hormuz and Black Sea.
European gas prices also decreased, but storage and demand conditions appear stronger compared to 2021. The article reports that ICE Brent fell over 7% on the day, following President Trump's decision to halt strikes against Iran, signaling progress in potential negotiations. The US official even hinted that discussions between the US and Iran have resumed, while Iranian officials reject any ongoing talks, citing shipping route discussions with Oman.
Overreactions are suggested given the persisting uncertainty surrounding the talks. Meanwhile, the Black Sea witnessed increased loading activity at the CPC terminal, shipping oil from Kazakhstan, although disruptions caused by Ukrainian attacks on Russian energy infrastructure have hampered loading. Tensions remain around the terminal, dissuading shipowners from loading, which has led to below-normal flow rates.
The article highlights the impact of uncertainty on the US Dollar, which has gained strength as traders seek refuge, while the British Pound faces downside pressure amid risk sensitivity. GBP/USD remains within a narrow range below 1.3450 in the European session. The Eurozone's recent high inflation rate has kept EUR/USD stable around 1.1505, but traders remain cautious ahead of upcoming US jobs data, particularly the JOLTS Job Openings Survey.
Gold trading experiences fluctuations, with traders waiting for further developments on the Middle East front. The US Dollar's performance supports gold prices, while Ripple (XRP) and Stellar (XLM) exhibit mixed price behavior amid derivative metrics suggesting a slight easing of downside pressure for both cryptocurrencies.
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