Deutsche Bank analysts report Brent Oil trading above $110 per barrel as the Strait of Hormuz remains constrained, sustaining a tight link between Oil and global yields. They note that Brent eased slightly after comments from President Trump but then crept higher, while inflation expectations fell and real yields drove rates, with TTF gas prices also pushing higher in Europe.

High prices, geopolitical risk linger

"By the close, Brent crude (-0.73%) was down to $111.28/bbl, though that decline had come after Trump’s comments on Monday evening, with oil prices then creeping higher for most of yesterday’s session."

"There hasn't been a single catalyst, but with Brent crude holding above $110/bbl and the Strait of Hormuz still blocked, investors moved to price a growing probability of imminent rate hikes."

"Interestingly, yesterday’s rates move came despite pretty stable oil prices, which is noteworthy given how tight the correlation has been between Treasury yields and oil since the Iran conflict began."

"The drift lower in Europe came even as natural gas prices recorded an eighth consecutive increase, with TTF gas rising +3.12% to EUR 51.82/MWh, its highest since early April."

"Elsewhere, Eurozone trade data showed the bloc’s trade surplus falling to 9-month low in March amid higher oil prices and a rising deficit with China."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)