Snapshot: Brent crude is languishing below $79 per barrel, hovering near its lowest levels since early March as physical supply dynamics shift rapidly. The market is pricing in the looming US-Iran interim agreement slated for Friday, which threatens to immediately unleash over 100 oil-laden tankers and reopen the Strait of Hormuz. This massive impending supply influx is colliding with the IEA slashing its global demand forecast, completely overshadowing last week’s 8.3 million-barrel US inventory draw ahead of today’s heavy US macro slate starting with Retail Sales at 08:30 ET and the FOMC decision at 14:00 ET.
- Key Technical Level: The $79.00 handle has transitioned from support to firm overhead resistance; a failure to reclaim this on the NY cash open exposes a clean run down to the March lows near $77.20.
- Session Risk: While the physical market is structurally weak, any hawkish surprise from the FOMC dot plot at 14:00 ET could trigger broader risk-off flows, compounding Brent’s downside despite a softer US Dollar Index at 119.50.
Bias into NY: We are structurally bearish and look to sell rallies up to $79.20, targeting $77.00. The sheer volume of Persian Gulf supply set to return on Friday, combined with the IEA’s warning of demand destruction, easily overrides yesterday’s inventory draw.