Brent crude prices fell in early Wednesday trading, extending the momentum from recent sessions and moving below the $80 level to reach a three-month low. The main driver of this move has been headlines surrounding a US–Iran peace deal. The two sides are expected to formalise their intention to end the war with the signing of a memorandum of understanding on Friday. In the meantime, reports indicate that oil tanker traffic through the Strait of Hormuz has increased, reflecting an easing of restrictions and growing expectations that a full reopening could follow after Friday. This would, over time, support the normalisation of supply from the region. Against this backdrop, oil prices are expected to remain close to current levels until the next stage of the process is confirmed on Friday, after which there may be scope for further declines towards pre-war levels.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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