Brent: Volatile path as Hormuz risk lingers – Commerzbank
Commerzbank’s Carsten Fritsch sees continued volatility in Brent as Strait of Hormuz negotiations remain unresolved and inventories tighten.
Commerzbank's Carsten Fritsch predicts ongoing volatility for Brent crude as the situation in the Strait of Hormuz remains unresolved and inventories tighten. Energy agency reports may support prices in the short term, but Fritsch anticipates a substantial drop once an agreement is reached, lowering his year-end Brent forecast to $75 per barrel from the previous $80.
The situation remains uncertain, with price fluctuations likely to persist for some time. Once a resolution is achieved towards the end of the year, the oil price may experience a significant decline, as observed during previous hopes of an agreement.
Next week, three energy agencies will analyze developments in the physical oil market in their monthly reports, which are expected to further support prices. The largest shortfall in US inventories of middle distillates is almost 12% below the usual level and the lowest for this time of year in 30 years. However, any disruption in the market is critical, given the already tight market conditions.
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