|

Brent: Covert tanker flows may ease supply pressure - Commerzbank

Commerzbank’s FX Research team, including Charlie Lay and Dr. Henry Hao, highlight that Brent crude has surged on Strait of Hormuz hostilities but see scope for gradual de-escalation in coming months. They argue covert tanker transits should allow Gulf oil shipments to recover, while petroleum products and natural gas face a more prolonged supply squeeze and less favorable outlook.

Covert flows temper supply shock

"The price of Brent crude oil has risen sharply as a result of the recent hostilities in the Strait of Hormuz. This makes a formal agreement between the fighting parties even less likely than before. But even without a diplomatic solution, a gradual de-escalation is likely to begin in the coming months, and thanks to tankers’ covert transits through the strait, oil shipments from the Gulf region should gradually recover."

"The outlook for petroleum products and natural gas is less favorable. Here, disruptions to transportation and production are likely to continue to limit supply for some time to come."

"For early Asian trading, the key variable will again be oil. Friday's Wall Street rebound reflected relief as Brent retreated from USD110. However, the subsequent Saudi pipeline shutdown, Houthi capture of Perim Island, and postponement of the Hormuz talks have renewed supply concerns."

"Brent crude oil prices fell 2.8% to USD104.61 last Friday but still gained 8.7% last week. This was on top of the near 8% gain the previous week, leaving Brent up 17% over the past two weeks."

"In Asia, the Middle East energy shock remains the dominant external risk. Net oil importers face a renewed deterioration in their terms of trade, while higher fuel prices threaten to complicate the inflation outlook and constrain monetary-policy easing across the region."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.



USD/JPY treads water near 158.00 ahead of BoJ

USD/JPY navigates an inconclusive range around the 158.00 neighbourhood ahead of the opening bell in Asia on Friday. Indeed, the pair alternates gains with losses following Wednesday’s decent pullback as investors gear up for the imminent interest rate decision by the BoJ. In the meantime, market consensus expect the central bank to keep its hands steady.

Gold remains sidelined just above $4,000

Gold leaves behind the recent three-day positive streak and faces renewed selling pressure near the $4,000 mark per troy ounce on Thursday. The precious metal’s daily decline comes amid marginal gains in the US Dollar and mixed US Treasury yields, while crude oil prices remain on the back foot.

HYPE soars 17% as ICE, Druckenmiller invest in tradeXYZ for US expansion
Hyperliquid (HYPE) jumps 17% on Thursday as Intercontinental Exchange (ICE) announced it will partner with trade[XYZ] to bring Hyperliquid-based perpetual futures markets to the US, expanding efforts to introduce on-chain derivatives trading within a regulated framework. Billionaire investor Stan Druckenmiller will also join as an investor in trade[XYZ].
BoJ preview: Hawkish hold

Having hiked rates by 25bp to 1.25% in September, the central messages from the BoJ were largely similar; upside price risks remained, real interest rates were still negative and further policy rate hikes should be expected.

A hot US economy is supposed to sink Gold. It didn't. Here's why
Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.