Oil Retreats From a Five-Week High on Ceasefire Hopes
Brent crude slipped around 0.9 per cent towards $88 a barrel on Tuesday, easing from Monday’s near-$90 close, as reports of a ten-day truce proposal offset the tenth night of strikes and fresh tanker fires in Hormuz. Prices remain near five-week highs and up roughly 20 per cent this month. The retreat came despite Yemen’s Houthis declaring a maritime embargo against Saudi Arabia.
Vessel traffic through the strait, normally a fifth of the world’s seaborne oil, has collapsed to a fraction of its usual level, and the new Houthi threat to Saudi shipping compounds the disruption. Goldman Sachs has said a $100, even $120, Brent scenario is “back in play” if flows stay choked, and US petrol has climbed back towards $4 a gallon. “The market is still quite complacent despite the price increase we have seen,” said Amrita Sen of Energy Aspects. For British households the transmission runs to petrol pumps and winter energy bills. Watch for confirmed physical-flow disruption or a Hormuz closure, either of which would trigger a fresh leg higher.