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Oil Prices Are Falling and Stocks Are up. Traders Worry They’ve Gone Too Far
WTI fell nearly 10% on the week as tanker traffic is expected to resume, while traders warn the rally may be overdone.
- On Thursday, oil tankers began moving through the Strait of Hormuz after President Donald Trump signed a 60-day ceasefire memorandum with Iran on Wednesday, easing global supply concerns.
- A US blockade of the waterway, which usually handles 20 million barrels of oil daily, had paralyzed shipping and sent prices soaring since late February, prompting the diplomatic breakthrough.
- Shipping experts at BIMCO warn the central channel remains "mined and un-navigable," while data from Vortexa shows 40 tankers carrying 80 million barrels are preparing to transit.
- Markets responded positively Friday, with WTI crude settling down 10% on the week while Japanese and South Korean stock indices surged as inflation fears receded.
- Analysts like Madison Cartwright of Commonwealth Bank warn the peace remains fragile, as toll-free transit is guaranteed for only 60 days before potential tolls or conflict arise.
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The agreement to reopen the Strait of Hormuz has brought swift relief to the markets. However, some traders fear that the stock market rally and the drop in oil prices may have been excessive.
IEA warns of oil supply glut
Oil prices headed for a sharp weekly decline, while the International Energy Agency warned of a potential supply glut. Benchmark crude prices were largely flat on Friday at around $80 a barrel, down more than 25% from a month ago. The reopening of the Strait of Hormuz after months of closure could unleash millions of barrels of previously stranded oil shipments, and Reuters noted technical trading indicators pointed to further price declines. Th…
·New York, United States
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Coverage Details
Total News Sources36
Leaning Left5Leaning Right4Center11Last UpdatedBias Distribution55% Center
Bias Distribution
- 55% of the sources are Center
55% Center
L 25%
C 55%
R 20%
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