Brent Slips as Energy Ceasefire Caps Oil Price
Brent falls 1.6% after Trump's energy ceasefire, but Middle East risks and unconfirmed pledges keep the oil market on edge.
Key Takeaways
- Brent crude falls about 1.6 percent to roughly $103 after Trump announces an energy ceasefire.
- The pledge is unconfirmed, and the situation in the Middle East keeps escalating.
- Momentum is neutral on the daily chart and still bullish on the weekly.
Anyone who bet on cheaper oil on Monday has gotten only a small discount so far. Brent trades at about $103 a barrel, roughly 1.6 percent lower, according to Finanzmarktwelt. Behind the move is a political announcement that nobody can yet verify.
Seven Dollars in Four Days: The Trend Still Points Up
Context first, because it puts the dip in perspective. Since last Tuesday, Brent has climbed from below $98 to as high as $104.71, a gain of about $7 in four trading days. Claudio Kummerfeld at Finanzmarktwelt describes a highly unstable market moving in waves, but with an upward bias.
The driver is the conflict in the Gulf. Iran is attacking more and more tankers, even as many ships still pass through the Strait of Hormuz under U.S. escort. Add the Houthi strike on Riyadh's airport, which killed 12 people and followed a Saudi offensive against the rebels. Consumer countries' inventories have fallen sharply after heavy deliveries. A fresh outage would hit a market with no cushion.
What the Price Is Discounting After One Post
The dip traces back to two statements by Donald Trump. First, he announced on Truth Social a ceasefire on energy facilities between Russia and Ukraine, saying both sides had agreed. According to Stefan Jäger, Ukrainian President Zelenskyy was surprised by this, and Russia reportedly hit a power plant near Kharkiv shortly afterward.
Second, he said Putin had agreed to deliver 300,000 metric tons of diesel immediately, 500,000 tons in November, and one million tons after that. Kummerfeld points to the BBC and urges skepticism. If it works, diesel futures would fall the most. It would also give Moscow room to repair refineries and export more fuel within weeks to months.
The effect extends beyond oil. Gold rose to about $4,217, partly because lower oil prices ease inflation pressure and could make Fed rate hikes less likely. Wednesday's U.S. inflation data should show whether that link holds.
What momentum says
Our snapshot of Brent crude on October 12 at $105.53 shows a mixed picture. Momentum signals bullish on the hourly (1h) and four-hour (4h) timeframes, neutral on the daily (1D), and bullish on the weekly (1W). The brief pullback has not reversed the broader uptrend, though the daily timeframe has cooled.
Scenarios
If the energy ceasefire holds and Russia actually delivers diesel, the dip below $103 gains room, since refinery and export volumes could return. A slide toward $98, last week's starting level, would then be conceivable.
If the pledges fizzle or the conflict between Saudi Arabia and the Houthis escalates further, the $104.71 high comes back into reach. A tanker attack in the Strait of Hormuz would accelerate that path.
If Wednesday's U.S. inflation data comes in hot, it supports the dollar and yields and can weigh on commodities overall. That applies to gold more than to oil, whose price depends mainly on supply news.