Brent Prices Plunge Below $90 as Conflict Pause Persists
Oil prices fell sharply on Monday (July 27th) after the pause in the conflict between the United States and Iran persisted. Brent crude for September delivery plunged 7.3% to around US$89.73 per barrel.
West Texas Intermediate (WTI) crude also weakened 6.5% to US$83.47 per barrel. The decline occurred as concerns about energy supply disruptions from the Middle East began to ease.
Iran stated that it would halt attacks as long as the United States also halted its military operations. Tehran maintains the principle of "strike for strike" and has conveyed this stance to Washington.
The United States previously halted its bombing campaign after nearly two weeks of attacks. President Donald Trump is said to be giving space for the diplomatic process, although the option of resuming attacks remains open.
The decline in oil prices also helped ease inflation concerns. HSBC believes that the previous energy surge had strengthened expectations that the Federal Reserve would need to maintain tighter policy for longer.
As long as both countries continue to refrain from attacks, oil prices have the potential to continue their correction. However, the market remains vulnerable to a rebound if the conflict escalates or energy delivery routes are disrupted again.
Source: Newsmaker.id
