Watch These Key WTI Levels as Oil Prices Swing Wildly Amid Middle East Conflict https://t.co/ZpVTR1bDu8 ...

Anna Edwards, Guy Johnson, Kriti Gupta and Mark Cudmore break down today's key themes for analysts and investors on "Bloomberg: The Opening Trade." Chapters: 00:00:00 - MLIV 00:00:07 - Oil Prices Dropping Fast 00:01:03 - US Dollar Headed Lower 00:01:34 - Can Fed Cut Rates? 00:02:38 - Bond Market Up -------- More on Bloomberg Television and Markets Like this video? Subscribe and turn on notifications so you don't miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9 Visit http://www. ...

Market Concerns & Inflation - Markets were initially concerned about the Middle East situation, particularly potential Strait of Hormuz closure or energy infrastructure damage, which could significantly increase inflation [1] - Oil prices potentially rising above $100 per barrel due to Strait closure could push inflation back above 5% and gas prices above $5 per gallon [2] - Easing Middle East tensions are causing oil prices to decline, suggesting a more positive inflation outlook and potentially allowing the Federal Reserve to lower interest rates [2][8] - Lower energy prices could offset some inflationary impact from tariffs [2] - Markets are currently more relieved by developments in Iran than concerned about upcoming tariffs [3] Federal Reserve & Tariffs - Federal Reserve Chair Powell is maintaining a "wait and see" approach regarding tariffs [4] - Recent economic data, including weaker economic surprise indexes, decelerating job growth, and friendly inflation prints, may be pushing the Federal Reserve towards easier monetary policy and another rate cut [5] - The final tariff terms, implementation, and pass-through to inflation are still unknown [6] - The debate now includes more voices on the dovish side, which is net bullish for investors [7] Market Sentiment - Market recovery is driven by optimism regarding no further escalation or potential resolution in the Middle East [8] - Lower energy prices are bullish for the markets [8] - Market pricing is heavily influenced by day-to-day news [9]

U.S. equities were higher at midday as concerns oil prices would spike because of the U.S. attack on Iran diminished. https://t.co/cgZT44lV1N ...

I guess if you take away the worst case scenario, that's actually helpful for lower oil prices. A couple of things to consider, though. One, Ali McCrossin RBC said over the weekend that she would caution against that knee jerk reaction that, quote, The worst is behind us.Now, the other factor to consider here, irrespective of the supply issue that may or may not happen with Iran is the demand side. So there's been a lot of stockpiling by China, a lot of stockpiling by other countries within the West as well ...

Oil Market Dynamics - Chinese traders are considered the most influential oil traders, primarily due to their significant purchases of Iranian crude oil [1] - Approximately 80% of Iranian oil is re-flagged through Malaysia before being exported, mainly to China [1] - The White House has seemingly turned a blind eye to sanctions, allowing Iranian oil to continue flowing at high levels [2] - There are concerted efforts to avoid interrupting the oil supply, with no party, including Iran, wanting to halt the flow [2] - Concerns about Iran closing the Straits of Hormuz are less about physical barriers and more about the potential for missile attacks on tankers [3] Supply and Demand - Current oil demand is extraordinarily high at 103 million barrels per day, equivalent to approximately 1300 barrels per second [5] - Global oil production capacity stands at 108 million barrels per day, indicating a spare capacity of 5 million barrels per day [5] - Spare capacity is primarily located in the Gulf region [6] - Strong demand, particularly due to Middle Eastern heat, has supported oil prices, with an extra 400,000 barrels per day of demand [9] - A cold winter in key markets (Northeast Asia, Europe, and the US) added over 1 million barrels per day of extra demand in Q1 [9] Geopolitical Risks and Market Sentiment - The market perceives a low risk of interruption in the Straits of Hormuz, as major players like China, the US, Europe, and Saudi Arabia want the oil to keep flowing [6] - The likelihood of the Straits of Hormuz being shut by the end of June is considered extremely low [7] - The market is in a plentiful supply situation, potentially pushing commodity prices lower even after accounting for risk premiums [8] - Incremental geopolitical disasters are needed to significantly increase oil prices [10]

LISA: THANK YOU SO MUCH. JOINING US IS STEPHEN SHORCK. HOW LONG DO YOU THINK THAT THEY WILL LAST.IT WILL DEPEND ON FURTHER ESCALATION AND HOW LONG THE HOSTILITIES. WE ARE LOOKING AT A SITUATION OF A WAIT AND SEE. THE MARKET HAS PRICED IN GREATER VOLATILITY.WHAT WE SAW BEFORE LAST THURSDAY WAS A MARKET SWITCHING INTO THE BRENT AND WTI BEGINNING IN 2026 HAD SWITCHED TO A MARKET WHERE PRICES FOR JANUARY WERE CHEAPER THAN FEBRUARY AND SO FORTH. THIS IS A CLASSIC FUNDAMENTAL TELLTALE THAT THE MARKET IS PRICING I ...

Geopolitical Risk & Oil Supply - The Strait of Hormuz is a critical chokepoint for global oil supply, with approximately 20% of the world's oil flowing through it [1] - A material disruption in the Strait of Hormuz would significantly impact global oil supply [1] - Iran has the potential to disrupt or restrict oil supply through the Strait of Hormuz, even without a full closure [2][3] Potential Impact on Oil & Fuel Prices - Any restriction or anxiety regarding oil supply through the Strait of Hormuz could significantly affect oil prices [3] - Increased oil prices would likely translate to higher fuel prices for consumers [3] Iran's Options for Disruption - Iran could harass shipping or direct ships into its territorial waters as a means of disruption [2] - A complete closure of the Strait of Hormuz by Iran would be difficult to sustain for a long period, potentially upsetting allies like China [2]

The straight of Hormuz is a narrow stretch of water that links the Persian Gulf to the rest of the world. About a fifth of the world's oil flows through it. That's the world's produced oil, the world's consumed oil.It has to go through that waterway. It's largely unavoidable. And so any kind of material disruption would be a big issue.Iran has always said that it could close the straits if threatened, if the situation demanded it. It would be very difficult for Iran to do that and certainly very difficult f ...

Geopolitical Risk & Oil Market Impact - The primary concern for investors is Iran's potential disruption of energy supply through the Straits of Hormuz, overshadowing other developments like US or Israeli attacks [1] - Current oil price levels do not adequately reflect the risk associated with potential Iranian intervention in the Straits of Hormuz [1] - Even a limited US attack on Iranian facilities like Fordo might not provoke an Iranian response of closing the Straits of Hormuz, due to the potential for a devastating US counter-attack on Iran's energy and industrial infrastructure [1] - Historically, Iran has been hesitant to disrupt energy supplies via the Straits of Hormuz, even during the Iran-Iraq War (1980-1988) when it faced widespread international opposition [3][4] US Foreign Policy & Middle East - Regime change efforts in the Middle East have historically led to instability and power vacuums, making significant US involvement in Iran a potentially risky strategy [1] - A limited, isolated US strike on Iran, followed by a call for negotiations, could be a viable strategy to de-escalate tensions [2] Global Power Dynamics - China relies on the US Fifth Fleet to secure its energy imports from the Middle East, creating a paradoxical situation where US military presence benefits China [1] - Russia's alliance with Iran is being questioned due to the ineffectiveness of Russian-made defense systems against Israeli attacks, potentially diminishing Russia's appeal as an ally [1] Economic Considerations - US energy independence is irrelevant if Iran closes the Straits of Hormuz, as oil prices would rise globally, impacting the US economy [1] - Rising oil prices due to escalating tensions could negatively impact President Trump's agenda on inflation [1]