Deutsche Bank analysts highlight that Brent Oil has seen sharp moves as markets react to prospects for a US-Iran deal. Brent crude fell 19.3% in May, its biggest drop since March 2020, and declined 11.1% last week as ceasefire hopes grew. However, Brent is up 2.4% this morning, with traders watching whether negotiations satisfy President Trump’s demands.

Oil swings with US-Iran deal hopes

"It was another eventful month, as hopes for a US-Iran deal meant Brent crude (-19.3%) saw its biggest decline since March 2020 when the pandemic lockdowns began. So stagflation fears eased dramatically, and the S&P 500 hit fresh records."

"Whether June continues the positivity of May will surely depend on whether the hopes of a US-Iran deal turn into reality. It's been 93 days now since the strikes began and 54 since the truce that later became a ceasefire started."

"For now, it seems Mr Trump is still deciding on whether the current negotiations between the two nations satisfy his demands. He has been surprisingly quiet over the weekend which indicates things perhaps coming close to a head."

"Recapping last week now and markets put in a strong performance overall, driven by mounting hopes for some kind of peace deal between the US and Iran. Several headlines pointed in that direction, with multiple outlets reporting that the two sides would agree a 60-day ceasefire extension."

"So that led to a sharp decline in oil prices, with Brent crude down -11.10% last week (-1.77% Friday) to $92.05/bbl. And investors moved to price out the chance of a protracted conflict as well, with the 6-month Brent future also down -4.64% to $84.18/bbl."

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