Brent crude prices edged higher in early trading on Friday, hovering close to the $80 per barrel level, broadly where they have traded since details of the Memorandum of Understanding began to emerge. The agreement provides for an initial 60-day period during which maritime traffic through the Strait of Hormuz is expected to return to normal. The prospect of a credible path towards the normalisation of shipping activity in the Persian Gulf has weighed on oil prices in recent sessions. However, the market now appears to be entering a period of consolidation as traders await further details and developments. Significant tensions between the parties remain unresolved, particularly regarding Iran’s regional proxies and its relationship with Israel. Against this backdrop, and with uncertainty persisting over the terms of any comprehensive agreement that may follow the Memorandum, Brent prices are unlikely to see substantial further declines in the near term.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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