Crude treads water this morning for a second day running, consolidating recent losses, with WTI having on Tuesday notched its biggest one-day decline in almost a year, in a violent pullback from the $77bbl mark.
Geopolitical tensions continue to underpin both Brent and WTI, with sellers continuing to lack conviction to drive price further to the downside, as participants remain on tenterhooks pending an Israeli response to last Tuesday’s Iranian missile barrage.
While such a response, per latest reporting, seems likely to target military as opposed to energy infrastructure, risks remain of a broader escalation in tensions, leading to fears of potential supply disruption continuing to put a floor under prices.
That is likely to remain the case for some time, even with the demand outlook still rather fragile, with few participants likely to want to carry short positions into another weekend fraught with gapping risk, amid the incredibly fluid situation.
