ING analysts Warren Patterson and Ewa Manthey note that Oil, specifically ICE Brent, rallied strongly last week on rising geopolitical risks around potential US action in Iran, but is trading softer as further US-Iran talks are scheduled. They highlight renewed US tariff uncertainty and still-elevated speculative positioning in Brent.

Brent eases after strong geopolitical rally

"The oil market had a strong week last week. ICE Brent settled almost 6% higher over the period as uncertainty over potential US action in Iran builds, with the US continuing to move military assets into the region and US President Donald Trump giving Iran a deadline to come to a nuclear deal."

"However, prices are trading softer this morning with further talks between the US and Iran planned for Thursday, while Iran’s foreign minister said that there is a chance for a diplomatic solution. In the case of a deal, we would see a fairly aggressive erosion of the risk premium currently priced into the market – although reaching a deal is easier said than done."

"The latest positioning data shows that speculators cut their net long in ICE Brent by a modest 17,876 lots over the last reporting week to 263,186 lots as of last Tuesday."

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