Crude Oil Forecast: Brent Still Bullish Despite $76 Short-Term Target
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Key Points:
- Iran and Oman have drafted a document that sets out the new traffic lanes and passage for the Strait of Hormuz. This plan excludes all traffic from US, Israeli and sympathetic countries ships.
- Diesel crack spreads remain high while SPR (Strategic release oil) is diminishing in this first IEA coordinated release. This may put further upwards pressure on US stocks and global diesel stocks. Higher prices at the pump to probably follow.
- Evidence that China is returning to the importing oil table has not provided fuel for buyers to lift the market aggressively yet. However, as US munitions stocks dwindle, the market is starting to price in the inability of The US to act in a meaningful way in The Straits.
A peace deal is far from being struck between the US and Iran, regardless of the talking heads and political murmurings. The Houthis have just attacked Saudi Red Sea refining ports as of Sunday afternoon. Bullish action in the face of bearish political tones. Let’s focus on The Iran/Oman agreement and the global stocks picture.