Brent oil fell below $100 as hopes rose for a US\u2013Iran deal. Spot Brent dropped to $97.76 after closing at $99.36, up +4.37% on the prior session.<\/p>\n
Brent was down a further -1.61% overnight, taking it back under $98. This reduced concerns about a stagflationary shock.<\/p>\n
The S&P 500 rose +1.02% and closed above its pre-strike level on 27 February. Oil futures prices remained below spot levels.<\/p>\n
The 6-month Brent future traded at $83.55. The 12-month Brent future traded at $78.57.<\/p>\n
The pricing gap between spot and later-dated contracts indicates expectations of lower oil prices over time. The article states it was produced with an AI tool and checked by an editor.<\/p>\n
With Brent crude recently pushing past $92 a barrel due to renewed tensions in the Strait of Hormuz, the market is showing signs of nervousness. However, the futures market tells a different story, with the 6-month contract trading near $85 and the 12-month future closer to $80. This steep downward slope, known as backwardation, indicates that traders see the current price spike as short-lived.<\/p>\n
We are looking at a market structure very similar to what we saw in early 2025, when hopes for a US-Iran deal pushed the Brent spot price well above its futures contracts. Back then, the market correctly anticipated that geopolitical fears would ease, allowing prices to normalize over the following months. That historical precedent gives us confidence in the current futures curve as a reliable indicator.<\/p>\n
For derivative traders, this suggests that selling front-month call options could be an attractive strategy to collect premium from the elevated volatility. This position benefits if the geopolitical risk subsides and prices either stabilize or fall back towards the levels predicted by the futures curve. The recent EIA Short-Term Energy Outlook, which projects a slight softening in global demand for the third quarter, further supports this view that the current price strength will not last.<\/p>\n
Another approach is to look at calendar spreads, which involve selling the near-term futures contract while simultaneously buying a longer-dated one. This trade profits directly from the expected flattening of the curve as the near-term price falls more sharply than the deferred price. It is a way to bet on normalization without taking an outright bearish view on oil over the long term.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Brent crude slipped below $100 on US\u2013Iran deal hopes; stocks rose, futures signaled lower prices ahead.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-50870","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t