Commerzbank’s FX Research team, including Charlie Lay and Dr. Henry Hao, notes that Brent Oil has been volatile as markets react to prospects of a US-Iran agreement and the continued closure of the Strait of Hormuz. They highlight last week’s sharp price drop and early Asian weakness, while also stressing that OECD stockpiles could cover the supply gap well into next year, though sectoral shortages may emerge earlier.

Oil reacts to Hormuz closure risk

"Brent crude oil prices rose 0.9% to USD103.54 last Friday but fell 5.2% for the week."

"Brent oil prices fell over 5% last week and opened lower by over 5% to USD98.30 in early Asian hours."

"There is no sign yet that the Strait of Hormuz will reopen."

"The supply gap must therefore continue to be filled from existing stockpiles."

"Based on the numbers alone, stockpiles—at least within the OECD—will last well into next year."

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