Oil: Price rebound drives FX shifts – Danske Bank

Danske Research Team notes that Brent crude briefly traded above USD 97 before easing below USD 95 as Iran–US ceasefire negotiations fluctuated. They highlight reports that OPEC+ may modestly lift July output, but see limited price impact unless exports rise. The rebound in Oil has already pushed global yields higher and influenced major FX pairs.

Brent swings on Iran and OPEC+ headlines

"In the Oil market, Brent crude reversed much of last week's ceasefire-driven decline, briefly trading above USD 97/bbl, after Iran reportedly halted negotiations with the US over continued fighting in Lebanon."

"Prices later eased after President Trump said negotiations with Tehran were continuing and signalled expectations of a deal to extend the ceasefire and reopen Hormuz 'over the next week'. Trump also claimed Israel and Hezbollah had agreed to stop shooting, helping Brent slip back below USD 95/bbl."

"In OPEC+, several member countries are reportedly leaning towards a modest 188,000 bpd increase in their July oil output target at Sunday's meeting, mirroring the June hike excluding the UAE."

"However, with production still well below target due to export cuts and the SOH [Strait of Hormuz] closure, the move is unlikely to affect oil prices unless it results in higher realised exports."

"A rebound in the oil price set the tone in FX and fixed income markets yesterday."

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