- Oil is trading slightly higher after falling more than $1/Bbl yesterday
- Traders are currently holding a record number of Brent call options
- Market participants are continuing to focus on risks in the Middle East with the US still pushing for a ceasefire
- Blinken meets with Saudi Arabia, urges Israel to seek peace (BBG)
- The US Secretary of State held talks with Saudi Arabia’s MBS on efforts to reach a peaceful conclusion to the conflict in the Middle East
- Blinken said, “Its very important that Israel responds in a way that does not create greater escalation and does not risk spreading the conflict”
- Israel has continued air strikes on Lebanon as it expands the war away from Gaza, and is still expected to retaliate against Iran in the coming days
- OPEC needs lower prices or more demand to combat US shale (BBG)
- Oil supply growth is set to outpace demand in 2025, which could lead to a weaker price environment
- Bloomberg expects US shale production to be cut back if prices fall below $56/Bbl
- OPEC still expects strong demand growth, which will likely be needed to offset the increases in global supply
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