Brent Hits Four-Year Peak, Then Falls Sharply
Brent oil prices plummeted on Thursday (April 30th) after briefly breaking through a four-year high, as the market continued to assess the potential for the US-Iran conflict to drag on and further impede energy flows through the Strait of Hormuz. The June Brent contract briefly soared above US$126 per barrel before turning lower and closing 3.4% lower at US$114.01. June WTI also fell 1.7% to settle at US$105.07.
The sharp intraday movements occurred as volume thinned ahead of the June Brent contract's expiry, driving volatility and amplifying the "rollover" effect to the lower-priced July contract. The July Brent contract closed relatively stable at around US$110.40, making the front-month decline appear larger even though tight physical supply remained unchanged.
On the positioning side, Kpler data shows that CTAs/trend-followers have previously shifted exposure to "maximum long" positions in Brent and WTI, which could limit additional mechanical buying impulses when sentiment becomes too crowded. However, the geopolitical premium remains as negotiations have not yielded a clear solution, while Washington considers further options and Tehran insists on maintaining control over Hormuz.
From a fundamental perspective, the effective closure of Hormuz remains a key transmission channel: supply disruptions trigger spikes in energy prices, heighten inflation risks, and weigh on the growth outlook—especially for energy-importing economies. Signs of market tightness are also evident in the increasing demand for replacement barrels from the US, including the surge in US oil exports to a record above 6 million barrels per day in the latest data.
Looking ahead, the market is likely to remain headline-driven. The main focus will be on the certainty of further US action (military and blockade), Iran's response regarding Hormuz, rollover dynamics to the next contract, and indicators of "demand destruction" in products (diesel/jet), which will test how long high prices can be maintained without impacting consumption. (Arl)*
Source: Newsmaker.id
