Oil Stable, Market Monitors US-Iran Negotiations
Oil prices stabilized after the United States and Iran reportedly continued talks, despite renewed military tensions. This situation has left the status of the ceasefire between the two countries unclear and has disrupted tanker traffic through the Strait of Hormuz.
Brent oil is trading near US$76 per barrel and is still heading for a weekly gain of more than 5%, despite a correction in trading on Thursday. Meanwhile, West Texas Intermediate (WTI) is trading within a limited range below US$72 per barrel.
Both parties are said to be continuing technical discussions, despite US President Donald Trump previously declaring the ceasefire agreement over. Tensions escalated after US forces attacked several targets in Iran over two days, prompting market participants to reassess the risks to energy supplies from the Gulf region.
The International Energy Agency (IEA) warned that renewed hostilities between the US and Iran risk hampering efforts to restore dwindling global oil supplies by the end of the year. However, the market is still seen as viewing the latest escalation as a challenge to the ceasefire, rather than a complete failure of the negotiations.
On the supply side, energy flows in the Gulf region continue to demonstrate resilience. The United Arab Emirates even increased crude oil production to an all-time high last month. However, shipping traffic in the Strait of Hormuz remains thin after nearly halting on Thursday, so traders are closely monitoring production and sales from Persian Gulf producers, including Saudi Arabia.
Market Impact:
For oil prices, the primary sentiment still stems from the Strait of Hormuz and the direction of US-Iran negotiations. If talks continue positively, oil prices could hold up or correct. However, if attacks escalate and tanker traffic is further disrupted, Brent could strengthen again.
For global inflation, persistently high oil prices could prolong concerns about energy-based inflation. This could make central banks more cautious in easing monetary policy.
For the US dollar and gold, rising oil prices could reinforce expectations of high interest rates, thus supporting the dollar. Conversely, gold could be under pressure if the market focuses more on inflation and interest rates than on gold's role as a safe haven asset.
For Asian markets, including Indonesia, high oil prices have the potential to dampen sentiment because they can increase energy import costs and the burden of subsidies. However, for energy and commodity stocks, this sentiment could be a positive catalyst in the short term.
Source: Newsmaker.id
