Snapshot: Brent crude has plunged below $78 per barrel, hitting its lowest level since early March, as a breakthrough US-Iran interim agreement begins to restore normal shipping flows through the Strait of Hormuz. This massive supply normalization is offset only slightly by tight physical buffers, with the US Strategic Petroleum Reserve inventory plumbing its lowest level since 1983. Today’s focus shifts to the macro demand outlook with the Philly Fed and jobless claims at 08:30 ET following yesterday’s FOMC updates.
- The key operational signal is the resumption of Saudi oil and LNG tankers departing the Persian Gulf, paving the way for millions of barrels of shut-in capacity from Saudi Arabia, the UAE, and Iraq to return to the global market.
- We watch for structural support near current levels as Cushing storage remains critically tight at approximately 20 million barrels, leaving shorts vulnerable to physical squeezes if US demand metrics surprise to the upside.
Bias into NY: Our bias remains tactically bearish toward $76.50 as Hormuz supply flows resume, though further downside could be cushioned if US yields continue their downward trajectory post-FOMC, keeping the dollar on the back foot.