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Brent slips below $80 as hopes build for Strait of Hormuz reopening
MUFG says oil has been trading more benignly than supply headlines suggest, with weaker Chinese imports and substitution helping offset risk premiums.
Oil prices have steadied despite Middle East supply risks, with Brent falling below US$80 as market participants gained optimism that a deal could reopen the Strait of Hormuz, according to MUFG research cited by FXStreet.
FXStreet reports MUFG’s Michael Wan said oil has been more benign than supply headlines imply, citing weaker Chinese imports and substitution through coal-to-chemicals and electrification.
Wan also noted weather-related risks remain, including the potential for a Super El Nino, even as trading has looked past Hormuz headlines.
In FXStreet’s broader market wrap, it also pointed to FX moves tied to the same deal hopes, with GBP/USD holding around 1.3450 and EUR/USD near 1.1550, while traders awaited US ADP Employment and ISM Services PMI data.
Latest closeBrent $78.86 ▼5.9%|EUR/USD 1.153 ▼0.1%|GBP/USD 1.345 ▼0.3%