A PLANNED two-week ceasefire between the United States and Iran and negotiations to end their conflict may mark the first genuine attempt to de-escalate, but there’s still much to be concerned about the world of pain physical oil markets are in.
Crude oil futures responded to the news by plunging, with Brent contracts dropping as much as 16% to a low of US$91.70 a barrel in early Asian trade yesterday after ending at US$109.27 on Tuesday.
The sharp selloff reflects relief that US President Donald Trump’s highly alarming threats to wipe out Iranian civilisation have been delayed.
It also reflects optimism that crude oil, refined product and liquefied natural gas (LNG) flows may resume through the Strait of Hormuz, and continue to do so if negotiations prove successful.
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