Brent falls sharply following Trump’s ceasefire declaration
The front-month ICE Brent contract has plunged by $7.88/bbl on the day, to trade at $69.18/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Escalating geopolitical conflicts in the Middle East have continued to add risk premiums to commodities in recent days, putting upward pressure on Brent’s price.
Following US airstrikes on three major Iranian nuclear sites, Tehran has reportedly targeted US military base in Qatar’s capital city of Doha.
“The [Iranian] attack appeared to be measured though, with no casualties reported,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
Separately, the Australian government has imposed sanctions on 60 vessels linked to Russia’s shadow fleet. This news has provided some support to Brent.
These sanctions are strategic measures aimed at reducing Russia's oil export revenues.
Downward pressure:
Brent’s price has lost momentum amid easing supply concerns in the global oil market.
US President Donald Trump has announced that a ceasefire between Israel and Iran was in place and urged both countries to uphold it.
The news has dragged oil prices lower, as earlier market expectations had factored in a potential escalation of the Middle East conflict.
Oil’s gains were capped “as President Trump’s “complete and total” ceasefire between Israel and Iran capped off what now feels like a geopolitical false start,” SPI Asset Management managing partner Stephen Innes said.
By Aparupa Mazumder
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