Snapshot: Brent crude has broken key support to trade below $78 per barrel, hitting its lowest level since early March after an interim US-Iran agreement paved the way to reopen the Strait of Hormuz. This massive geopolitical breakthrough unlocks millions of barrels of sidelined Gulf capacity, completely overshadowing tight physical storage indicators. Today’s secondary macro inputs come from the Philly Fed and weekly jobless claims at 08:30 ET.
- Supply flood vs. tight inventories: The return of Saudi, UAE, and Iraqi flows through Hormuz drives the spot capitulation, even though physical realities remain exceptionally tight with Cushing stocks down to 20 million barrels and US SPR inventories at their lowest level since 1983.
- Policy digestion: Crude is failing to find a floor despite yesterday’s FOMC economic projections and a softer US Dollar Broad Index at 119.51, proving that local supply dynamics are firmly in the driver’s seat.
Bias into NY: We are bearish into the New York open, targeting a test of the $76.50 support level as shipping activity accelerates, while keeping an eye on the 08:30 ET US data for any temporary demand-driven short-covering.