Brent: Prices extend sharp decline – Deutsche Bank
Deutsche Bank’s Early Morning Reid team, including Peter Sidorov and Jim Reid, note that Brent Oil has reversed more than half of its recent 13% rally as Middle East de-escalation headlines weigh on energy markets.
Deutsche Bank's Early Morning Reid team, encompassing Peter Sidorov and Jim Reid, report that Brent Oil has reversed over half of its recent 13% rally, driven by de-escalation headlines in the Middle East. The drop may mark the biggest weekly decline since June, with corresponding decreases in European natural gas and a favorable environment for global bonds and equities.
Over the past 24 hours, market sentiment has improved due to a series of optimistic headlines regarding Iran, including potential ceasefire announcements between the US and Iran. This optimistic outlook has led to a possible trajectory for the biggest weekly decline since June, with Brent crude dropping -8.6% since Friday. The key drivers of yesterday's market moves were Middle East developments, such as reports suggesting US diplomats would return to the region.
Iran and Oman also discussed an interim framework aimed at resuming shipping through the Strait of Hormuz, potentially clearing mines and establishing a temporary joint maritime corridor. This convergence of news pushed oil prices down, with Brent settling -3.89% lower and trading -2.60% lower at over $86/bbl this morning. As of the current report, Brent has declined more than half of its 13% rise over the past two weeks, indicating a significant reversal.
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