TD Securities warns oversold Brent could rebound toward $100/bbl as Strait of Hormuz disruptions deplete inventories to historic lows.
Brent crude prices, currently at $74/bbl, are oversold and vulnerable to a sharp rebound as disruptions in the Strait of Hormuz push inventories to historically low levels. The tightening supply conditions may trigger a short-covering rally, driving prices higher.
Global and Cushing inventories have fallen to unsustainable levels, with Cushing stocks slightly below 19 million barrels. Analysts see potential for Brent to rise into a $90–110/bbl range, with a near-term move toward $100/bbl possible.
A rebound in crude prices could lift inflation expectations, reinforcing the Federal Reserve’s restrictive policy stance. This would increase carry costs for gold, adding further pressure to the precious metal.