Key Moments
- Brent crude closed at $111.28/bbl, remaining above $110 as the Strait of Hormuz stayed blocked.
- Investors continued to factor in a higher likelihood of imminent rate hikes amid persistent oil market tension.
- TTF natural gas advanced +3.12% to EUR 51.82/MWh, marking its eighth straight gain and the highest level since early April.
Persistent Supply Constraints Support Oil Prices
Deutsche Bank analysts observed that Brent crude oil prices remained above $110 per barrel as constrained flows through the Strait of Hormuz continued to underpin the market. They highlighted that this backdrop has kept the relationship between oil prices and global bond yields tight.
According to the analysts, Brent crude initially eased following comments from President Trump but subsequently moved higher again. They reported that, “By the close, Brent crude (-0.73%) was down to $111.28/bbl, though that decline had come after Trump’s comments on Monday evening, with oil prices then creeping higher for most of yesterday’s session.”
Rates Reaction and Oil-Link Persists
Analysts at Deutsche Bank noted that the blockage in the Strait of Hormuz and sustained Brent levels above $110 per barrel continued to influence expectations for monetary policy. They pointed out that, “There hasn’t been a single catalyst, but with Brent crude holding above $110/bbl and the Strait of Hormuz still blocked, investors moved to price a growing probability of imminent rate hikes.”
They also emphasized that real yields were the main driver of rates, as inflation expectations declined even while oil prices stayed relatively steady. As they put it, “Interestingly, yesterday’s rates move came despite pretty stable oil prices, which is noteworthy given how tight the correlation has been between Treasury yields and oil since the Iran conflict began.”
European Energy Prices and Trade Data
In Europe, the analysts flagged continued strength in natural gas prices alongside softer moves in other markets. “The drift lower in Europe came even as natural gas prices recorded an eighth consecutive increase, with TTF gas rising +3.12% to EUR 51.82/MWh, its highest since early April.”
They further noted that higher energy costs were reflected in regional trade dynamics: “Elsewhere, Eurozone trade data showed the bloc’s trade surplus falling to 9-month low in March amid higher oil prices and a rising deficit with China.”
Key Market Metrics
| Asset / Data Point | Move | Level | Comment |
|---|---|---|---|
| Brent crude | -0.73% | $111.28/bbl | Still trading above $110 per barrel |
| TTF natural gas | +3.12% | EUR 51.82/MWh | Eighth consecutive increase, highest since early April |
| Eurozone trade balance | – | 9-month low (March) | Pressured by higher oil prices and a growing deficit with China |
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