ING: Oil Prices Extend Gains on US-Iran Tensions, Tight Physical Market
ING analysts note that oil prices have risen further as US-Iran tensions escalate and tanker flows through the Strait of Hormuz face pressure. Large Q2 inventory drawdowns and the end of global SPR releases leave the market tighter.
Oil prices have continued their upward move as geopolitical risks in the Persian Gulf mount, according to ING analysts Warren Patterson and Ewa Manthey. The escalation of US-Iran tensions is putting additional pressure on tanker traffic through the Strait of Hormuz, a key chokepoint for global crude flows.
The physical market is also showing signs of tightening. Large inventory drawdowns in the second quarter, combined with the imminent conclusion of strategic petroleum reserve (SPR) releases worldwide, are reducing available supply buffers. This combination of geopolitical and fundamental factors is supporting the recent price strength.
Source: FXStreet Forex News