Brent oil prices are trading flat at the start of the European session, holding just above $98 per barrel. The market has hovered around this level since the beginning of the week. The situation in the Persian Gulf has not materially changed since the start of the war, with reduced production and severe restrictions on shipping through the Strait of Hormuz keeping approximately one fifth of global oil and gas supply off the market. Nevertheless, prices are now around $20 lower than in early March, reflecting hopes that renewed talks between the US and Iran could lead to a lasting truce and the reopening of the Strait. If a credible path towards normalisation emerges from this weekend’s talks, prices could fall further, moving back towards pre-war levels. On the other hand, a continuation of the conflict without an understanding between the parties is likely to keep traders concerned about future supply and could trigger fresh price spikes.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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