Snapshot: Brent crude has plunged below $78 per barrel, hitting its lowest level since early March, as physical supply dynamics shift dramatically following a US-Iran interim agreement to reopen the Strait of Hormuz. This geopolitical breakthrough threatens to unleash millions of barrels of halted output from major Gulf producers, completely overshadowing yesterday’s FOMC policy update as traders brace for the 08:30 ET US data print.
- Physical shipping recovery in the Persian Gulf puts the March support of $77.50 under immediate threat, though critically low physical inventories—including US Cushing stocks tight at 20 million barrels and the SPR at its lowest level since 1983—should limit runaway downside.
- The 08:30 ET US macro docket, featuring Unemployment Claims and the Philly Fed Index, represents the primary demand-side test of the session, particularly as global risk sentiment wavers with the VIX climbing to 18.44.
Bias into NY: We hold a tactical bearish bias targeting $76.80, as the resumption of Gulf shipping flows outweighs tight onshore inventories, while a softer US dollar broad index at 119.51 offers only marginal support to the downside move.