UOB strategists report that Oil prices initially fell sharply as the United States (US) military campaign against Iran remained paused, with WTI dropping to USD 79.26 and Brent to USD 84.10. However, West Texas Intermediate (WTI) later rebounded as much as 5% above USD 83 after fresh fighting and news of a US interception of an Iranian attempted surprise attack, underscoring heightened geopolitical-driven volatility.

Crude swings with Middle East risk

"The continued decline in oil prices amid signs of de-escalation in the Iran conflict has been a welcome development for markets, with attention now shifting to the July FOMC meeting."

"That said, oil rebounded this morning (with WTI rising as much as 5% to top US$83) as fresh fighting erupted as the US military said it successfully intercepted an Iranian “attempted surprise attack” on US troops based in the Middle East."

"The recent rebound in crude oil prices has led markets to price in a 35.8% probability of a 25bp rate hike at the July FOMC meeting."

"Oil prices fell sharply as the US military campaign against Iran remained paused, raising hopes that a resolution to the conflict could be reached in the near term."

"WTI crude declined 4.1% to USD 79.26 per barrel, its lowest level since July 16, while front-month Brent crude fell 4.8% to USD 84.10 per barrel."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)