Brent oil prices rose at the start of the session, briefly touching $100 before retreating to just below that important level. Despite the announcement by the IEA of a 400 million barrel release from strategic reserves, markets remained focused on events in the Gulf, where the war continues to effectively block the Strait of Hormuz, impeding the outflow of oil from the world’s main production region. The fact that oil traders shrugged off news of the IEA’s decision, focusing instead on reports of attacks on oil tankers, illustrates the current market mindset. With the war now in its 13th day and no realistic prospect of de-escalation, there is growing concern that the conflict may extend beyond the short term, not only constraining the supply of Gulf oil but also potentially forcing local producers to halt production due to a lack of storage capacity. Against this backdrop, the longer the conflict continues, the higher the levels of anxiety among oil traders, creating scope for prices to rise further.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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