Analysts say geopolitical uncertainty and low global inventories are likely to keep a floor under oil prices and inflation through 2026.
Oil prices are expected to remain under pressure despite hopes of a lasting ceasefire between the United States and Iran, with analysts warning that rebuilding global energy supply chains will take considerably longer than financial markets anticipate.
Brent crude eased to around $84 a barrel on Thursday morning after surging earlier this month following renewed conflict in the Strait of Hormuz, but market analysts believe geopolitical risks, low inventories and constrained fuel supplies will continue supporting higher prices.
Bianca Botes, managing director at Citadel Global, said softer United States inflation data had provided some support for global markets, although uncertainty surrounding the Middle East continued to influence investor sentiment.
"Wall Street saw a positive session yesterday as the United States' softer inflation reading continued to bolster markets. The S&P 500 closed 0.38% higher, while the Dow closed up 0.29%. However, the tech heavy Nasdaq declined as chip stocks remained under pressure," Botes said on Thursday.
