Snapshot: Brent crude has plunged 3.2% to $79.55 a barrel, breaching the psychologically key $80 mark to hit its lowest level since early March. This fourth consecutive session of liquidation is driven entirely by supply-side expectations as traders price in the resumption of shipping through the Strait of Hormuz following an interim US-Iran ceasefire agreement. Despite political skepticism at the G7 summit regarding the Friday signing timeline, physical flows are already anticipated to return rapidly.
- Key Level: The clean break of $80.00 pivots focus to the March support block at $78.50; any intraday rallies will face stiff resistance at the broken $80.00 handle.
- NY Session Watch: Watch for US cash desk reactions to the G7 discord, as European diplomats openly dispute Washington’s optimism over the Friday reopening, exposing the market to short-covering risk given that US emergency reserves remain at their lowest level since 1983.
Bias into NY: We hold a tactical bearish bias targeting $78.50, but advise against chasing fresh shorts at these levels; the steep discount is vulnerable to a sharp squeeze if Friday’s Swiss negotiations hit a snag, a risk amplified by a softer US dollar index at 119.50.