The prompt-month Brent futures contract strengthened from $66.57/bbl at 06:55 BST this morning to $67.35/bbl at 11:00 BST before softening to $67.15/bbl at 11:25 BST (time of writing). This morning’s support may have emerged due to short covering flows. Overall sentiment may still be pressured by the progress of talks between the United States and Iran, both of whom agreed to begin drawing up a nuclear deal last weekend. Such a deal could soften the geopolitical risk premium in oil prices amid the US sanctions on Iranian crude, although a quick resolution to these talks appears unlikely. In other news, Russia’s economy ministry has cut its forecast for the average price of Brent crude in 2025 to $68/bbl from last September’s forecast of $81.70/bbl. Moreover, the share of OPEC oil in India’s imports declined to a record low in fiscal year 2024-25 as refiners opted for cheaper Russian oil, with Russia being India’s top oil supplier for the third time. In macroeconomic news, the Federal Reserve Bank of New York reported, in its Survey of Customer Expectations, that the reservation wage (the lowest pay rate that would get people to take a new job) fell to $74,236 last month versus the series-high of $82,135 seen in November 2024’s data. Finally, at the time of writing, the Jun/Jul’25 and Jun/Dec’25 Brent futures spreads stand at $0.94/bbl and $2.75/bbl, respectively.
