ING analysts Warren Patterson and Ewa Manthey note that WTI and Brent fell sharply but see upside for Oil prices as US–Iran tensions persist and no peace deal is in sight. They highlight tightening global and US Oil markets, falling inventories, and sharply lower Chinese Oil imports that could later rebound and tighten balances further.

Tightening balances and geopolitical risk

"The oil market sold off heavily yesterday, with WTI settling 3.4% lower on the day and crucially below $90/bbl."

"With no imminent deal in sight and with the global oil market tightening significantly every day, we see upside to prices, particularly if these disruptions linger into the third quarter, a period of seasonally stronger oil demand."

"The latest data from the American Petroleum Institute (API) continues to show a tightening in the US oil market."

"Crude oil inventories are estimated to have fallen by 9.1m barrels over the last week, while gasoline inventories fell by 1.2m barrels."

"This highlights China’s ability to help rebalance the global market."

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