#OilPriceRollerCoaster

🎢 Oil’s been whipsawed all week on Iran-US headlines

The ride since May 5:

The spike to $115+
May 5: Brent hit ∼$111-113 after US-Iran exchanged fire in the Strait of Hormuz
Trigger: Iran attacked Navy destroyers and oil tankers. US retaliated, destroyed 6 Iranian boats
Fear: Strait handles 20% of global oil. Markets priced in supply disruption risk

The crash to ∼$100
May 6: Brent dropped 7.4% to $101.75, WTI down 8.2% to $93.89
Why: US Defense Sec confirmed ceasefire holds. Reports of a 14-point US-Iran MOU to end the war
May 7: Brent settled at $100.06, down 1.2%. Hit $96 briefly on deal optimism

Where it sits now
Brent: ∼$100-103
WTI: ∼$94-96
Gas: US national average $4.536/gal regular, $5.015 premium. PA hit 4-year highs at $4.69-4.99

Why it’s so volatile

Geopolitical risk premium:
Every clash in Hormuz = +$10-15/barrel
Every peace headline = -5-8% in one session
Traffic in the Strait is still muted

Physical vs futures disconnect: Rabobank says physical cargoes traded way above $100 in April. Futures haven’t caught up

Demand-side cushion: China cut imports by ∼2.4M bpd in Apr-May. SPR releases + weaker demand helped cap prices

What’s next

Base case: Citi sees Brent average $110 in Q2, easing to $95 in Q3, $80 in Q4 if Hormuz reopens by late May

Risk case:
40% chance of 3+ quarter disruption per Dallas Fed survey
If Hormuz stays closed past June: Brent $150-200 possible
Dallas Fed model: $167 oil, $5+ gas, +0.5% core inflation

Market’s bet: Prices slipped on deal hopes. Trump said “very possible we’ll make a deal”. But analysts warn we’re in “ceasefire with no oil” purgatory

Bottom line: Oil is trading headlines, not fundamentals. Until Hormuz physically reopens, every tweet/attack = 5-10% swing.

You watching this for trading, gas prices, or inflation impact?