Oil prices are trading in the lower half of the $70-$110 range, which was formed after the deterioration of the Middle East situation, and are expected to remain within this range for the time being. Downward pressures include concerns about demand decline due to the worsening global economy and OPEC+'s reduction of voluntary production cuts, while upward pressures include concerns about the worsening Middle East situation and declining US crude inventories. Additionally, the possibility of Venezuela leaving OPEC could advance the organization's 'de-Westernization,' potentially leading to a prolongation of coordinated production cuts and the imposition of tolls in the Strait of Hormuz. The Iran war is increasingly taking on the appearance of an 'economic war,' with continued US sanctions and threats of a blockade of the strait by Iran. Given these factors, oil prices are likely to maintain the $70-$110 range.
Same factors as WTI: geopolitical risks and supply cuts versus demand worries keep Brent in a range.
Middle East tensions and potential Hormuz blockade support prices, but demand concerns and OPEC+ cuts pressure them.
