The recent decline in oil prices is primarily driven by fading fears of supply disruptions. Earlier, markets had priced in worst-case scenarios, including a prolonged conflict and potential blockage of critical energy trade routes. However, as ceasefire negotiations progressed, traders began unwinding these risk premiums.
Oil prices are declining due to increased hopes of a US-Iran ceasefire, alleviating fears of supply disruptions. Markets are now unwinding previous risk premiums, which had factored in potential prolonged conflict and blocked trade routes. This development indicates a shift in…
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