In a market update sent to Rigzone by the Rystad Energy team late Monday, Rystad highlighted that the White House has released “a 20-point peace plan to end the war in Gaza”.
Rystad noted in the update that the plan “includes a ceasefire, hostage swap for Palestinian prisoners, a phased Israeli withdrawal, and a disarming of Hamas”. Although Rystad labeled the development as “welcome news” in the update, it added that Rystad “predicts that geopolitical risk will still remain elevated, with oil prices holding firm as markets brace for the world’s response”.
Jorge Leon, Rystad Energy’s Head of Geopolitical Analysis, warned in the update that the peace plan “is still far from becoming a reality”.
“Hamas would need to formally accept it, and even if that hurdle is cleared, the most difficult step will be ensuring effective implementation,” he added.
“Securing compliance from all sides and building mechanisms to enforce the agreement will likely prove to be the true test of the plan’s durability,” he continued.
Leon went on to state in the update that, “in the meantime, volatility in the region is unlikely to subside in the immediate term”.
“The geopolitical risk premium remains firmly embedded in oil markets, with upside price risks persisting as traders brace for possible setbacks or renewed escalation,” he said.
“Over the coming days and weeks, the balance between cautious optimism and entrenched uncertainty will continue to shape market sentiment,” Leon warned.
“Arab countries appear to be supportive of the plan, and their backing will be essential for the process to materialize and succeed,” he continued.
In an oil market update sent to Rigzone by Rystad earlier on Monday, Rystad Energy’s Chief Economist and Global Market Analysis Director Claudio Galimberti said Brent’s “recent climb” was “driven by the intensification of a series of geopolitical crises around the world, from Ukraine to Iran and Venezuela, while the global supply and demand fundamentals point to a large inventory build in Q4 on the back of OPEC+ unwinding”.
“In the short-term, for Brent it is a tug of war between these two forces, which are so far offsetting each other out: geopolitics and OPEC+ unwinding,” he added.
Galimberti highlighted in the update that U.S. President Donald Trump “urged the European Union to accelerate the phase-out of Russian oil and gas” and added that “Trump said Ukraine could retake all occupied territory, a notable rhetorical shift, adding additional market uncertainty reflected in the Brent spike”.
In a research note sent to Rigzone by the JPM Commodities Research team late Monday, J.P. Morgan analysts, including Natasha Kaneva, head of global commodities strategy at the company, said “the estimated value of open interest in energy markets increased by $29 billion WoW to a YTD high”.
“The increase was led by crude oil and petroleum products … as the complex experienced strong price increases (Brent/WTI +5 percent WoW) further supported by a healthy net inflows of $5 billion across all trader types,” they added.
“Our oil strategists note a continued upward trajectory in the U.S. oil rig count, signaling a robust rebound in drilling activity,” they continued.
“The estimated value of open interest in natural gas markets also increased by $2.7 billion, primarily driven by a robust net inflow of $2.4 billion across all trader types,” the analysts said.
“Our natural gas strategists find that while maintenance on the Norwegian Continental Shelf did result in a bigger than expected decline in natural gas supplies, this was offset by weak natural gas demand MTD,” they went on to state.
Rystad Energy describes itself on its website as an independent research and energy intelligence company. On its site, J.P. Morgan describes itself as a leading global financial services firm with assets of $3.9 trillion and operations worldwide.
To contact the author, email andreas.exarheas@rigzone.com
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