Brent crude back below $100: markets await opening of Strait of Hormuz
The memorandum, which is supposed to gradually launch shipping along the crucial route for energy supplies, was handed over by the U.S. to Iran the day before, Bloomberg reported
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Contracts for Brent crude oil with delivery in July at the auction on May 7 again fell below $100 per barrel. Investors are reacting to positive reports regarding the peace agreement between the U.S. and Iran, draws the attention of Reuters.
The day before, a Bloomberg source said that Washington had handed Tehran a one-page "memorandum of understanding". If Iran accepts it, it will lead to the gradual opening of navigation through the Strait of Hormuz and the lifting of the U.S. blockade on Iranian ports, the source said. However, nothing has been agreed so far, he said, and detailed talks on Iran's nuclear program will have to be held later.
Against this backdrop, Brent fell more than 2% to $99 per barrel. U.S. WTI with delivery next month also fell by more than 2% to $92.87.
While the situation in the Middle East remains uncertain, "the dynamics are moving in a positive direction" and markets are noticing this, says Lombard Odier chief economist Sami Chaar (quoted by Reuters).
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