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Higher inflation risks lift Brent toward $80 on stalled Middle East recovery
OCBC has raised its end-2026 Brent forecast to $80 a barrel from $75, citing slower supply recovery around the Strait of Hormuz.
OCBC analysts Sim Moh Siong and Christopher Wong said renewed US-Iran tensions have pushed oil higher and revived global inflation concerns, with markets fully pricing a Federal Reserve rate hike by October. The renewed risk backdrop is also spilling over into bond yields and the US dollar.
In a notable forecast change, OCBC lifted its end-2026 Brent outlook to USD 80 per barrel from USD 75 per barrel. The firm pointed to expectations of a slower Middle East supply recovery as negotiations to reopen the Strait of Hormuz remain stalled.
FXStreet also highlighted broader market moves tied to the same tension cycle, including currency pressure and expectations around upcoming US data. It cited early Wednesday moves with GBP/USD easing toward 1.3500 and EUR/USD trading below 1.1600, while gold recovered to trade above $4,320 heading into the European session.
The newsletter also noted that crude prices rose to a fresh high since July 24, adding to inflation fears and reinforcing expectations for a September Fed rate hike. It said WTI climbed for a third straight day to a fresh high since July 24 during the session.
Latest closeGold $4,376.80 ▼1.2%|WTI crude $90.79 ▲5.9%|Brent $95.25 ▲5.3%