Oil Prices Plummet Amidst Easing Iran-Israel Conflict and Fed Speculation

Steepest Weekly Decline in Two Years

• 📉 Oil prices are on track for their steepest weekly decline in two years, following an agreement between Israel and Iran.
• ⚠️ Fears of supply disruption have subsided, causing any risk premium associated with the conflict to evaporate.

Market Performance and Pre-Conflict Levels

• 📈 Brent crude futures saw an early trade increase to over $68 a barrel, while US West Texas Intermediate crude reached $65.8.
• 📊 Both contracts are set for a weekly fall of approximately 12%.
• 📍 The benchmarks have returned to levels seen before the conflict began.

Volatility Driven by Geopolitical Events and US Policy

• ⚡ Prices initially hit a five-month high after a US attack on Iranian nuclear sites, but then dropped significantly when Donald Trump announced a ceasefire.
• 🔍 Traders and analysts currently see no material impact from the crisis on oil flows.

Federal Reserve Speculation Boosts Prices

• 🏦 A report suggesting Trump plans to choose the next Federal Reserve chief earlier than usual has fueled bets on US interest rate cuts.
• 💡 Such cuts are typically expected to stimulate demand for oil, providing some support to prices.