EBC Markets Briefing | Oil prices languished even Iran launched attack on ship

Oil prices headed for steep weekly losses as more stranded oil tankers exited the Strait of Hormuz. US core inflation hit the highest since October 2023, a boon to the US dollar, which takes a toll on energy prices.

Iraq urges OPEC to significantly increase the country's oil supply quota, following reports it would consider quitting the cartel over the dispute. That would be a heavier blow to the cartel than the UAE's exit.

IRGS attacked a Singapore-flagged cargo ship, US officials said, testing the ceasefire deal signed last week. Non-OPEC producers are ramping up oil output.

Both Canada and Brazil have set record production. But shale oil production in the US has "probably" plateaued over the past six to 12 months, said Chevron CEO Mike Wirth.

The IMF said on ‌Thursday that it has seen energy and commodity prices fall since Iran reopened the Strait of Hormuz, ⁠but it will take time for prices and Gulf trade flows to normalise.

Crude oil inventories in the US decreased by 6.1 million barrels during the week ending 19 June, according to the EIA. This marks the lowest inventory level since October 1984.

EBC Financial Group analyst says Brent crude was locked in a strong bearish markdown phase, with RSI making new lows alongside the price. Despite that, a dead-cat bounce toward the $79 cannot be ruled out.

Asset recap

As of market close on 25 June, among EBC major products, Micron Technology shares led gains as Q3 reports beat Wall St estimates. Its customers had committed $22 billion to lock in supplies of memory chips.

Apple announced price hikes on MacBooks and iPads, its first formal move to pass higher memory and storage costs on to consumers after CEO Tim Cook said increases had become unavoidable.

Germany equities traded higher for the first time this week, as a sharp retreat in crude oil prices to levels seen before the recent Middle East conflict soothed inflation anxieties.

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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