Brent crude recovered a significant portion of its losses amidst claims of ceasefire violation between Israel and Iran, highlighting the fragility of the declared truce. The global benchmark initially fell sharply, responding to the news of a “complete and total ceasefire.”
However, this initial optimism was quickly tempered by reports from Israel of renewed missile activity, directly contradicting the ceasefire declaration. This prompted a swift rebound in oil prices, indicating the market’s deep skepticism about the truce’s immediate effectiveness.
The “war premium” that had been priced into oil due to Middle East tensions is now in the process of being unwound. However, the quick recovery of prices suggests that traders remain highly vigilant to any signs of renewed conflict, which could quickly push prices higher again.
Stock markets globally, including the FTSE 100, saw a generally positive response to the initial ceasefire news, with travel and airline stocks performing particularly well. This indicates a broader market relief, even as the oil market grapples with the complexities of a fragile truce.
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