Higher-For-Longer Oil Scenario Is Here To Stay

AI Summary

Oil prices continue to rise amidst ongoing Middle East hostilities, signaling a tightening physical market despite earlier expectations of a glut. The breakdown of the U.S.-Iran ceasefire has contributed to renewed concerns over oil supply stability.

Oil prices have been on a climb for over a week now as hostilities in the Middle East continue, and despite recent talk of a glut, the physical market is flashing signs of tightness—and higher oil for longer. Earlier this month, analysts were quick to start warning of an oil glut looming over the world as traffic via the Strait of Hormuz recovered in leaps and bounds amid the U.S.-Iran ceasefire. That was one shaky ceasefire, however, and it broke down soon enough to the apparent surprise of most oil forecasters. Traffic via Hormuz is once…