Brent Crude Stabilizes Above $100 as Supply Risks Reprice

Key Moments

Market Volatility Shows Signs of Cooling

Deutsche Bank analysts note that Brent Oil continues to trade above $100 per barrel, but with tighter intraday swings, indicating that the extreme volatility seen recently has moderated. Price action has reflected a balance between ongoing geopolitical supply threats and emerging signs of relief on the export front.

According to the analysts, prices had been underpinned by conflict-related supply disruptions and Iranian strikes. However, sentiment shifted when headlines emerged about an Iraq–Turkey arrangement that would allow oil exports to move through Turkish territory, removing the need to transit the Strait of Hormuz.

Decoupling From Broader Risk Sentiment

Deutsche Bank highlights that broader risk assets have begun to show some resilience even as oil remained elevated. They observe:

“There is also a bit more calm in markets at the moment and a small hint that there is a decoupling from the price of oil as the last 24 hours have seen more positive risk markets and lower yields in spite of Brent crude (+3.20%) closing above $100/bbl for a fourth consecutive session, at $103.42/bbl.”

The analysts point out that the improvement in risk appetite gained further traction as crude prices pulled back:

“Optimism has been boosted a bit more this morning as oil is back down a couple of percent seemingly on an Iraq deal with Turkey to resume oil exports through their territory and thus not requiring the Strait of Hormuz.”

Narrower Trading Range Signals Reduced Stress

The bank attributes part of the broader relief move in financial markets to the fact that oil price fluctuations have become less extreme compared with prior sessions:

“The broader relief rally was partly driven by more moderate moves in oil prices than we’d seen of late.”

They further underscore the change in trading behavior:

“In fact, it was the first day since March 5 that Brent traded within a range of less than 5%.”

Futures Curve Suggests Prolonged Period of Elevated Prices

While spot market volatility has eased, investors are still anticipating sustained strength in oil prices. Deutsche Bank notes that positioning in the futures market reflects expectations for a longer spell of higher energy costs:

“That came as investors also priced in a longer period of higher oil prices, with 6-month Brent futures (+3.26%) rising to $86.12/bbl.”