Brent oil prices edged higher in early Tuesday trading, reversing the losses of the previous session as uncertainty remains elevated in the Gulf region. Yesterday’s easing came as traders priced in hopes of a near-term resolution to the conflict, after the US administration signalled its willingness to address the Iranian blockade in the Strait of Hormuz, calling on its allies for military assistance. Despite the muted response to that request, traders took a more constructive view, focusing on the American President’s apparent shift in stance and the possibility of increased efforts to resolve the situation. At the same time, the IEA hinted at the potential for further releases from its strategic oil reserves in an attempt to ease supply concerns, helping to stabilise prices. However, the situation remains highly volatile, with no clear off-ramps towards the normalisation of energy flows from the Gulf, which account for nearly 20% of global output. Against this backdrop, prices are likely to remain supported above $100, with further gains possible the longer the situation persists.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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