The Brent oil price closed at $101.21 per barrel on Wednesday – its highest settlement since May.
Although oil closed slightly over $100 per barrel ($100.69) on July 23, the last time it closed higher than yesterday’s price was on May 22, when it settled at $103.54 per barrel.
The WTI oil price saw a similar development.
WTI settled at $96.05 per barrel on Wednesday, which was also the commodity’s highest close since May 22, when it ended the day at $96.6 per barrel. On June 3, WTI closed slightly under Wednesday’s settlement, at $96.02 per barrel.
In a market analysis sent to Rigzone on Thursday, Artem Bakushev, Head of Risk at Monaxa, highlighted that Brent crude moved above $100 and settled near $101.21 per barrel “as escalating Middle East tensions intensified fears surrounding major energy shipping routes, while the U.S. 10-year Treasury yield climbed to roughly 4.84 percent, around its highest territory since late 2023”.
Bakushev noted in the analysis that, “together, those moves create a particularly unfriendly equation for risk assets”.
“Expensive energy attacks profits through transportation, production, and household costs, while elevated bond yields compress valuations by increasing discount rates and financing costs,” he said.
“Producer-inflation data therefore becomes much more than another calendar release – a stronger reading could reinforce higher for longer rate expectations, while softer inflation could offer bonds and growth stocks some relief,” he added.
“Consumer companies, real estate, and highly valued growth shares are particularly vulnerable because their operating economics and valuation mathematics can deteriorate simultaneously,” he continued.
Bakushev went on to state that today’s U.S. PPI, jobless claims, housing data and crude-inventory figures “therefore matter because they will determine whether the next move is driven by inflation, the dollar, or physical scarcity”.
“Another large inventory draw would strengthen the case for Brent remaining above $100, while an unexpected build could signal either softer demand or improving supply and encourage consolidation,” he said.
“Hotter U.S. inflation with resilient employment would produce a more complicated outcome by supporting the nominal inflation premium while raising yields, strengthening the dollar, and increasing the risk of future demand destruction; softer inflation, weaker labor data, and another substantial crude draw would be more cleanly bullish,” he added.
Bakushev noted that “the controversial conclusion” is that $100 per barrel oil “may actually contain the seeds of its own reversal”.
“As long as geopolitical supply losses exceed the demand being destroyed by high prices, crude can stay structurally elevated, but once exports normalize or inventories begin rebuilding, the market could discover that the very price spike created by scarcity has already weakened the consumption needed to sustain it,” he warned.
In a report sent to Rigzone on Wednesday, Emily Ashford, Standard Chartered Bank’s Energy Research Head, outlined that the bank’s “core view” on crude oil is that an “ongoing stalemate in the U.S.-Iran conflict means oil prices are gradually grinding higher, punctuated by sharp up and downside moves on headlines”.
“We expect this trend to continue through Q3, with little sign that diplomatic progress will relieve export restrictions through the Strait of Hormuz and ongoing risks to Red Sea shipping, compounded by sporadic military strikes on both vessels and energy infrastructure,” Ashford added.
Ashford noted in the report that the past week “has seen little apparent diplomatic progress between the U.S. and Iran”.
“Meanwhile further direct conflict has continued … The rhetoric between the U.S. and Iran remains heightened and military attacks from both sides have driven front-month Brent blend prices higher week on week,” Ashford added.
“Brent for delivery in November pushed over $100 per barrel in early trading on 9 September, after closing at a six-week settlement high of $97.92 per barrel on 8 September,” Ashford pointed out.
“Prices remain above key moving averages, with the 100-day at $91.55 per barrel. Backwardation at the front of the forward curve steepened week on week to $3.54 per barrel,” the Standard Chartered Bank Energy Research Head continued.
“Further down the curve, Brent for delivery in five years rose by $0.21 per barrel to $69.54 per barrel,” Ashford went on to state.
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