Crude oil was the standout mover overnight, with prices falling another 3.5% following Monday’s 7% plunge. Brent and WTI crude both dropped sharply yesterday as Iran’s retaliatory attacks were far weaker than feared, and as the likelihood of Iran blocking the Strait of Hormuz faded.
It was understood that the US asked China to intervene and persuade Iran not to disrupt shipping passing through the Strait. Then this morning’s ceasefire further reduced the perceived threat to Middle Eastern oil supply routes.
Having approached $78 per barrel on Sunday night, to trade at its highest level since early January, front-month WTI pulled back towards $64 in the first hour of trade this morning.
This high-to-low move meant that WTI dropped 17% in the space of 48 hours, ripping out the excess risk premium that the Iran-Israeli hostilities added to the oil price.
Front-month WTI is now back to levels last seen ahead of Isreal’s first airstrikes on Iran on Friday 13th June.
Source: TradingView
