Oil Prices Fall: Why Experts Still See Crude Above $100

Oil prices fall sharply this Monday after Trump declared a US-Iran peace deal “now complete” over the weekend, sending Brent crude tumbling below $84 a barrel, its lowest point since early March. The Brent crude oil prices slide also extended Friday losses, when prices dropped from $93 to around $87.50 on deal hopes alone.

And while the oil price today looks calmer on the surface, analysts are not rushing to call this the end of the crisis. The crude oil price forecast from most major banks sits well above $100, and the US-Iran oil deal impact on actual physical supply will take months to materialize. Iranian authorities confirmed a 60-day negotiating period for a final agreement covering nuclear issues and sanctions relief, which means the Strait of Hormuz oil risk is far from resolved at the time of writing.

Also Read: West Marine Store Closures May Grow Beyond 59 Stores Brent Crude Prices, Strait Of Hormuz Risk And Oil Market Outlook Strait of Hormuz geographic location map Source: EnergyNow What Drove The Drop In Oil Prices This Week Oil prices fall every time a peace signal comes out of Washington, and this week was no different. Brent crude oil prices dropped another 4% Monday morning in Asia-Pacific markets, building on a slide that started Thursday at $93 a barrel. Iran’s Foreign Minister Seyed Abbas Araghchi told reporters that a memorandum of understanding “has never been closer,” and a senior Trump administration official put the probability of signing at around 80%.

US Energy Secretary Chris Wright also said ship traffic through the Strait was “rising very meaningfully,” which gave markets another reason to sell. Still, UBS analysts led by Henri Patricot said there is “little evidence” of any short-term improvement in vessel traffic or actual energy flows through the region, and that crude loadings inside the Gulf remain “extremely low.” The oil price today reflects optimism, not barrels actually moving.

Tony Sycamore, analyst at IG, stated: “Hard to see