Oil prices are falling on global markets: what’s behind the trend
15 June 12:14
Oil prices on Monday, June 15, fell to their lowest level since March 10 after U.S. President Donald Trump and Iranian officials announced that Washington and Tehran had reached a framework agreement on a peaceful settlement and the resumption of shipping through the Strait of Hormuz. This was reported by "Komersant Ukrainian", citing Reuters.
Brent crude futures fell 4.21% in the first half of the day to $83.65 per barrel, while contracts for the North American WTI blend fell by 4.74% to $80.86 per barrel.
The official signing of the memorandum of understanding is scheduled for Friday in Switzerland.
“The geopolitical risk premium that had been built into oil prices is now rapidly shrinking as traders factor in the prospect of a resumption of oil supplies,” said Tim Water of KCM Trade.
Investors are also trying to assess how quickly Middle Eastern producers will be able to restore oil production and export volumes following the damage caused by the shelling, and whether the number of ships heading to the Persian Gulf will increase.
“Although uncertainty may necessitate an upward revision of our Brent price forecast—to $80 per barrel by year-end—it is worth noting that the expectations of a supply surplus observed before the war will not return until oil flows through the Strait of Hormuz recover to 60%,” according to a note by Vivek Dhar of the Commonwealth Bank of Australia.
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