Oil Prices Witness Historic Reversal Amid Trump's De-escalation Signals

Global markets have experienced extreme volatility as WTI prices surged toward $120/barrel before retreating to $85/barrel following interventionist comments from Trump regarding middle-eastern diplomatic efforts.

Market Dynamics and Expected Management

The diplomatic shift serves to mitigate inflation pressures. With S&P 500 futures and Nasdaq rallying, traders are pricing in relief despite underlying supply constraints.

Supply Constraints and Structural Risks

• Hormuz Strait traffic down by 90%
• Daily global supply deficit of 18 million barrels
• Oversupply of storage facilities nearing critical limits.