The Commodities Feed: Ceasefire Optimism Weighs on Energy Markets

Optimism over a potential US-Iran ceasefire and the reopening of the Strait of Hormuz is putting downward pressure on energy markets. However, the physical recovery of oil supply is expected to be gradual due to production shut-ins and refinery damage.

Key Takeaways

• 1.Potential US-Iran deal involving a 60-day ceasefire and reopening of the Strait of Hormuz is weighing on energy prices.
• 2.Oil supply recovery will be gradual rather than immediate due to upstream production shut-ins and infrastructure damage from previous attacks.
• 3.US commercial crude oil inventories fell significantly (12.39m barrels total including SPR) while domestic refinery runs jumped to 94.5%.

Table of Contents

• Energy – Gradual oil supply recovery in event of a deal
• Metals – Gold erases losses on ceasefire hopes
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