Snapshot: Brent crude has plunged below $78 per barrel, hitting its lowest levels since early March as geopolitical risk premiums completely evaporate. This physical capitulation is driven by an interim US-Iran agreement reopening the Strait of Hormuz, which is cleared to bring millions of barrels of halted Gulf output back online. We look to the 08:30 ET Philly Fed and claims data for any macro-driven demand cushion to this supply rout.
- Cushing inventories remain critically tight at 20 million barrels, while US Strategic Petroleum Reserve stocks have depleted to their lowest levels since 1983, which should provide a hard physical floor beneath this spot liquidation.
- A VIX surge of 12.37% to 18.44 points to broad-based de-risking across macro books, meaning any further acceleration in Saudi and Iraqi shipping flows will easily trigger stops down to key support.
Bias into NY: We are tactically bearish Brent into the NY open, targeting a test of $76.50 as physical supply return dominates the tape, though a softer US dollar index at 119.51 may temporarily slow the descent.