Oil prices rebounded sharply after a day of decline, erasing earlier losses in just ten minutes following reports of a missile attack on a US base in Jordan by Iran. The geopolitical tension in the Middle East, particularly involving Iran’s claim of striking the Azraq base, appears to have reversed the downward trajectory of Brent and WTI crude oil prices. Prior to the rebound, Brent crude was reported at $83.75 and WTI at $78.55, both having dropped around 17% over the past three days. The incident has heightened concerns over potential disruptions in oil supply, affecting market outlooks.

Key Takeaways

• The missile attack on a US base in Jordan appears to have swiftly reversed the decline in oil prices, highlighting geopolitical risk impact.
• Market pricing suggests increased concerns over oil supply disruptions could push prices higher, consistent with YES outcome support for reaching new all-time highs.
• The probability of crude oil reaching a new all-time high by September 30 remains low, at 4.8%, but has slightly increased for December 31, currently at 12.5%.

What to Watch

Observers will closely monitor geopolitical developments in the Middle East, particularly any further escalations involving Iran and US interests. Key actors, including officials from OPEC and the IEA, may provide statements or actions that could influence market perceptions of supply risk. Changes in market pricing will likely reflect any new geopolitical or supply-related developments, with potential implications for the likelihood of oil prices reaching new all-time highs by the end of the year.

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