EBC Markets Briefing | Energy prices jump after closure of Strait of Hormuz

Oil prices climbed more than $2 a barrel Thursday as Iran declared the critical energy chokepoint, the Strait of Hormuz, closed after the US launched a new wave of strikes.

OPEC oil output in May hit its lowest in more than two decades, a survey found. Saudi Arabia saw a further decline, although Iraq increased supply due to increased domestic use.

Meanwhile, US crude inventories fell by 7.2 million barrels in the week ended June ⁠5, the EIA said, compared with expectations for a 4 million-barrel draw. They have fallen 79 million barrels since the Iran war.

US natural gas supply and demand will both rise to record highs in 2026, the agency said in its Short-Term Energy Outlook. Benchmark price has rallied to over $3 per MMBtu.

LNG prices are set to climb to levels not seen in more than three years as hotter weather in Asia and restocking needs in Europe boost demand, according to Morgan Stanley.

The bank added that losses in Persian Gulf supply have been largely mitigated by increased production at alternative facilities and newly launched capacity in North America.

The US natural gas price is currently in a minor mean-reversion pull-back, consolidating sideways to build a potential base. There may be more gains ahead which pushes the price beyond $3.34, said EBC Financial Group analyst.

Asset recap

As of market close on 10 June, among EBC major products, T-Mobile US shares led gains as Deutsche Telekom eyes full T-Mobile merger in what could be the biggest deal in history.

Qualcomm suffered a large drop ahead of its upcoming release. The chip giant predicts the end of the passive chatbot era and the beginning of autonomous AI systems that act on users' behalf.

Bullion tumbled to a 6-month low on inflation fears and Trump's threats to attack Iran. Citigroup has turned cautious on gold's near-term prospects, lowering its three-month price target for the metal to $4,000.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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