Crude oil surged another ~7% overnight on the worsening rhetoric around Iran, taking its sharp bounce from last week’s low to ~15%. This has been a similar move to the one at the start of June, and if common sense prevails, the outcome should be the same, with the energy complex renewing its downtrend if/when diplomacy returns around the Strait of Hormuz.
- We feel the risk/reward favours the bears around US$80, but this is a dangerous, fluid, news-driven market.
MM is cautiously bearish towards Brent Crude around US$80/barrel.
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