Russia and Iran erased previous losses

Yesterday was a choppy session for oil, at the end prices went up: ICE Brent front month moved +1.1% higher to $119.81/b and WTI NYMEX for July delivery traded +2.0% higher at $117.58/b.

During the session, the lowest trading level for Brent was $115.56/b (-3.3%), it reflects the concerns following the impacts of the US Fed decision to hike interest rates by 75bp. The central bank wants to curb the economic activity to reduce inflation, meaning it would reduce oil consumption and thus weaken the demand. The Bank of England and the Swiss National Bank also raised rates yesterday.

Later in the day the market reversed, due to several news. First, Deputy Prime Mister Novak from Russia said his country would stay in the OPEC+ alliance after the end of the present agreement (in October 2022). But, is country is nowhere close to its production quota and is likely to produce even less in the future. In April OPEC+ lagged 2.78mb/d below quotas.

Second, the US blocked properties and interests of several Chinese and Emirati companies involved in the trading of Iranian oil, this move puts pressure on Tehran to revive the nuclear deal.

Today oil is trading slightly lower, -0.2% for ICE Brent.