JPMorgan abandons Iran conflict baseline as oil nears $105

  • JPMorgan abandoned its baseline forecast for the Iran conflict’s endgame after assumed economic redlines were crossed without a clear exit strategy.
  • Brent traded near $105-$106 a barrel after approaching $110, while U.S. diesel reached a record $6.31 per gallon and the 10-year Treasury yield crossed 5%.
  • Global inventories fell about 555 million barrels, versus JPMorgan’s earlier 1.4 billion- to 1.6 billion-barrel projection, as weaker demand and record U.S. production absorbed much of the disrupted supply.

JPMorgan Chase has abandoned its baseline forecast for how the Iran conflict will end, saying economic thresholds it expected would push President Donald Trump toward an agreement were crossed without a clear exit strategy. Brent crude traded near $105-$106 a barrel after approaching $110, above the bank’s estimated September fair value of about $90. U.S. gasoline reached $4.37 a gallon, diesel hit a record $6.31, and the 10-year Treasury yield crossed 5%. Strait of Hormuz traffic fell to the low teens from more than 120 vessels a day before the war, while Houthi attacks and advances in Yemen, damage to Saudi Arabia’s East-West Pipeline and strikes on Russian refineries added to supply risks. Global crude and refined-product inventories fell about 555 million barrels, roughly one-third of JPMorgan’s earlier 1.4 billion- to 1.6 billion-barrel projection, as demand ran more than 4 million barrels per day below year-earlier levels and U.S. output reached records. JPMorgan said inventories and weaker demand could cushion disruptions for now, but warned that the buffer is narrowing and prices could rise without a diplomatic breakthrough.

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