Oil: Prices jump on Hormuz tensions – MUFG
MUFG’s Michael Wan notes that Oil has spiked on renewed tensions in the Strait of Hormuz, even as Brent remains below US$85/bbl. He highlights Iran’s proposed restrictions on US and Israeli ships and regional conflict risks.
Oil prices have surged due to heightened tensions in the Strait of Hormuz, with Brent remaining below US$85/bbl. Iran has proposed restrictions on US and Israeli ships, potentially causing further regional conflict. Despite this volatility, MUFG's base case predicts a downward trend for oil prices, tempered by periodic spikes and de-escalation.
The dollar has strengthened alongside oil due to concerns over renewed Middle East tensions and the upcoming US Nonfarm Payrolls data. Oil prices, while higher in absolute terms, are still low compared to historical levels. The global economy seems resilient, with lower oil imports from China contributing to this resilience. Meanwhile, the US Dollar remains defensive around 1.3450, benefiting from Middle East uncertainty.
EUR/USD remains above 1.1500, with traders watching the July NFP report for market direction. In cryptocurrency news, Shiba Inu is facing pressure amid risk-off sentiment, while the US Bureau of Labor Statistics is set to release July's Nonfarm Payrolls data, with analysts expecting a rise of 80,000 jobs.
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