Brent oil prices is hovering just above $105 per barrel as European trading got underway this Friday. After oscillating between $102 and $110 over the last 24 hours the price returned to its mid-point as traders focus on the negotiations between Iran and the US. This dynamic reflects optimism that a realistic path for normalization in the Persian Gulf will soon emerge from the ongoing talks, allowing for the return of the region’s crude to the global market. However, there is still a high degree of uncertainty over the outcome of the negotiation, as no sign of agreement on sensitive points such as what will happen to Iran’s enriched uranium, or on long-term guarantees of free shipping through the Strait of Hormuz. Against this backdrop, prices will continue to fluctuate according to news headlines, but unless a realistic prospect for normalization emerges soon there could be scope for sharper increases in global energy prices, especially if fears over shortages of specific products such as diesel and jet fuel materialize.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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