Crude starts the week flat, with Brent holding above $85/b

Quantum Commodity Intelligence – Crude oil futures were little changed in after-hours trading in Asia on Monday as the benchmarks firmed near seven-week highs.

First month August 24 ICE Brent futures were trading at $85.30/b (0750 GMT), compared with Friday’s settlement of $85.24/b.

At the same time, August 24 NYMEX WTI trade at $80.78/bversus Friday’s settlement of $80.73/b.

Brent is now up 11% from early June lows, rebounding strongly from early OPEC+ losses, with oil markets expected to remain in deficit for the balance of 2024 as geopolitical tensions intensified.

“Brent oil is now trading at just over $85/b, even around $2/b above its May average. It is currently supported by the many crises, especially the threat of an escalation of the conflict between Israel and Hezbollah,” commented Carsten Fritsch of Commerzbank.

Last week, the Israeli military said it had “approved and validated” plans for an offensive in Lebanon, while the US warned over the weekend that any Israeli military offensive north of its border risks an Iranian response in defense of Hezbollah.

However, the stronger dollar this month has capped further, while the US Federal Reserve is seen as unlikely to change interest rates until the latter part of the year.

Meanwhile, a second low-pressure weather system in the wake of Alberto was seen as little threat to energy infrastructure in the Gulf of Mexico.

“The low is expected to move inland over the next several hours and the chance of tropical cyclone formation is diminishing,” the National Hurricane Center said in its latest bulletin.