Oil: Volatile range trading outlook – Rabobank
Rabobank’s Joe DeLaura details how renewed United States (US)–Iran tensions and disruptions at the Strait of Hormuz have driven a sharp rally and subsequent correction in Brent and West Texas Intermediate (WTI).
Rabobank's Joe DeLaura highlights the impact of US-Iran tensions and Hormuz disruption on oil prices, with Brent and WTI expected to fluctuate within a wide range. Brent is currently trading near $81, while WTI is $76.30/bbl. The bank anticipates Brent prices to oscillate between $70-75 and $95-$100, while WTI will range between $72.25-$80.50/bbl.
The uncertainty surrounding a potential deal to reopen the Strait of Hormuz is the primary driver of this volatility, as both sides lack common ground. If a deal is reached, it may only be a short-term solution, with further tensions likely to resurface. The world's oil consumption is still declining by 2-5 mb/d due to potential Strategic Petroleum Reserve releases, and an additional 5-6 mb/d from refined products.
The bank forecasts a significant gap between oil and refined products inventories, with Middle East refinery exports returning to normal by mid-2028.
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