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Investment bank Shore Capital suspect the fall in the oil price may have gone too far.
Brent crude has dropped from around $110 a barrel in mid-May to below $71 a barrel today – Shore analyst James Hosie reckons it may rise back over $80 a barrel once the boost from reopening the strait of Hormuz ends.
Rapid decline to low $70s may be an over-correction - Near term oil prices have declined by over 15% following the mid-June US-Iran ceasefire agreement that has enabled the gradual resumption of transit through the Strait of Hormuz and reduced the threat of a fresh escalation in the military conflict.
In our view, the sharp drop in oil prices has been driven by the release of oil tankers previously stuck in the Gulf back onto the global market, including Iranian cargoes that are currently sanction free.
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Rolling coverage of the latest economic and financial newsInvestment bank Shore Capital suspect the fall in the oil price may have gone too far.Brent crude has dropped from around $110 a barrel in mid-May to below $71...
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