Market Analysis by covering: Brent Oil Futures, Crude Oil WTI Futures. Read 's Market Analysis on Investing.com
Citi says Brent crude prices could rise to this level in a prolonged Iran conflictThe war in Iran is sending shockwaves across the globe, but the US economy has managed to stay remarkably steady so far.
How long the relative calm lasts is unclear and will likely depend on the duration of the conflict.nowcast. The war’s effect on economic activity for the January-through-March period will be limited. Still, the economy’s momentum, or lack thereof, at the start of the year will be crucial because a tailwind of some degree will help minimize the macro shock that may be brewing for Q2. The good news: a moderate rebound is expected for Q1 growth following the weak increase in output in Q4. The Atlanta Fed’s current Q1 nowcast still reflects a 2.1% annualized rise inThe Dallas Fed’s Weekly Economic Index offers a more granular and current review, and on that score, there’s no sign that the war has derailed the recent reacceleration of the trend. WEI’s current reading is 2.6% as of Mar. 14. Using this as a proxy for the year-over-year change in GDP suggests that economic activity is stable, and perhaps even strengthened through mid-March. But these are still early days for assessing the war’s effects on the US and the global economy. Three weeks into the conflict, the repercussions continue as the energy shock reverberates. Europe and Asia are more vulnerable, given their higher reliance on imported oil. The US, a net oil exporter, has a substantially higher level of immunity. But oil is priced globally. As I reported last week, “Oil is priced in a single worldwide marketplace, which means that shifts in supply, demand, and geopolitical risk spill across borders regardless of how much a country produces.”Yet, the Wall Street Journal’s new survey of economists highlights expectations for resiliency, at least so far: “Economists Don’t See a Recession Unless Oil Hits $138—and Stays There for Weeks.” WTI traded at roughly $95 a barrel on Thursday. Predicting oil prices is challenging, to say the least, especially in the current environment. Presumably, the war will end soon, but no one knows the timeline, except perhaps one man in the White House. This much is obvious: the longer the attacks continue, the longer the energy infrastructure is degraded in the Gulf region, and the longer that oil and natural gas exports from the Middle East are blocked, the deeper the economic pain and the longer and slower the eventual recovery. Surveying the disruption of exports through the Strait of Hormuz to date, Priyanka Sachdeva, senior market analyst at Phillip Nova, said: “The damage has been inflicted, and even if safe passage for tankers is somehow negotiated through Hormuz, reviving logistics fully fledged can take an awfully long time.”Writing on X yesterday, E.J. Antoni, chief economist at the Heritage Foundation, a conservative think-tank that’s closely aligned with President Trump, advised: “If war is done in next few days, damage to energy infrastructure is minimal, and Iran lets ships transit strait unmolested, there’ll be minimal impact; but drag this on for months and destroy lots of infrastructure, then impact will be big; no one knows the future.”Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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