Oil: Trump rules out the possibility of further attacks in Iran; WTI falls back below $90 (-1.4 per cent)

Brent crude is down again to $96.5 (1.8 per cent). Gas is up 1.2 per cent at 86.7 euros

(Il Sole 24 Ore Radiocor) - Oil prices continue their downward trend, with US President Donald Trump ruling out the possibility of a new offensive against Iran. Against this backdrop, Brent futures – having already fallen by 16 per cent over the week – the sharpest drop since the start of the Covid-19 pandemic – are down 1.85 per cent at $96.54 per barrel. Meanwhile, WTI futures fell by 1.42 per cent to $89.54. At the same time, gas prices rose slightly in Amsterdam to €86.7 per MWh (+1.2 per cent).

Specifically, yesterday, in a telephone interview with CNN, Trump described an order for new attacks against Iran as “highly unlikely” whilst talks to end the conflict are ongoing. These remarks allay fears of a resumption of hostilities, which had been mooted in recent weeks for the period following the US mid-term elections. “The crude oil market appears to be pricing in a relatively optimistic scenario of easing tensions, even though a comprehensive agreement between Washington and Tehran has yet to materialise,” explained Sugandha Sachdeva, founder of SS WealthStreet, a research firm based in New Delhi. However, “unless there is a significant diplomatic breakthrough accompanied by a sustained normalisation of maritime shipping flows through the Strait of Hormuz,” she added, “crude oil prices are likely to retain a geopolitical risk premium, with short-term support expected at $93 per barrel for Brent”.

To gauge developments in the political situation in the Middle East, investors are also turning their attention to Israel, where former Israeli general Gadi Eisenkot – Benjamin Netanyahu’s main rival in the recent elections – has been tasked with forming a government.

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