Home · Business · Sep 9 archive
Brent Crude Hits $100/Barrel as Supply Stress Drives Market Cautiousness
Developing
In Short: Brent crude has reached $100 per barrel for the first time since July, reflecting ongoing supply concerns and a shift in market dynamics, according to FXStreet.
Low-level kinetic activity in the Gulf has continued overnight, but markets are increasingly pricing in a prolonged period of supply stress as Brent moves decisively above $100/barrel, according to FXStreet. This development is being felt across energy-linked assets globally.
Flows are continuing to perform well despite a hawkish shift by the Fed, indicating that pricing is now moving independently of financial conditions. Breaking the flows down into developed and emerging market energy names, we see two key differences compared with the flows in Q1.
FXStreet notes that supply factors remain dominant, and there is a risk that the significant restraint materializing through global supply channels and central bank responses warrants a more cautious approach. Retail investors have been liquidating their energy holdings in recent sessions, diverging from institutional flows.
OCBC’s Christopher Wong expects Asia ex-Japan (AxJ) currencies to start the week on a selectively cautious footing after renewed US–Iran tensions lifted Brent above US$96, reflecting the ongoing geopolitical and supply concerns in the energy market.
What's still developing
- In another sign of light conviction, our data show that after a period of alignment retail investors have been liquidating their energy holdings in recent sessions, diverging from institutional flows." "Iraq is seeking a significant increase in its OPEC+ production quota as the group reviews member capacity ahead of setting future targets.
Sources
- Fxstreetlink