TD Securities Sees Oil Holding Above $90 on Risk Outlook

Key Moments

Stabilization Around Key Price Level

TD Securities strategist James Rossiter reports that oil prices are consolidating just above the $90 per barrel mark, with Brent crude anchoring within a $90-100 trading band since the ceasefire took effect. He points out that market participants appear broadly at ease with crude near these levels, indicating a degree of short-term equilibrium in pricing.

Brent’s Trading Range and Market Sentiment

Rossiter underscores that the firm’s central projection for oil to hover slightly above $90 per barrel is currently being realized in the market. He notes that the prevailing backdrop of geopolitical tensions seems to be fostering what he describes as a limited comfort zone around – but not substantially above – this price area.

According to Rossiter, “Brent oil prices have remained range-bound between $90-100/bbl since the ceasefire began.” This contained price action reflects a market that is neither pricing in a dramatic escalation nor a rapid easing of current geopolitical risks.

Focus on the Strait of Hormuz and Energy Outlook

A central concern for traders remains the outlook for the Strait of Hormuz, a key transit point that Rossiter identifies as a continuing focal point for the market. As he puts it, “Whether the Strait of Hormuz remains open or closed (or seemingly both at once) remains a key focus.”

He also highlights that “Markets seem to be converging on the view that energy prices will settle near their current levels,” suggesting that, for now, investors are positioning around a scenario in which crude prices stabilize close to present levels rather than break decisively higher or lower.

“Our base case assumption for oil prices to sit slightly above $90/bbl appears to be playing out for now.” Rossiter adds, “Indeed, the dynamics of the tensions appears to suggest a certain degree of comfort around—but not much above—this level.”