Breakfast briefing: Oil prices fall on expectation a Hormuz deal is close
Oil prices have declined following reports that a deal to reopen the Strait of Hormuz may be imminent. Meanwhile, US economic data shows a cooling labor market and a dip in factory orders, signaling a potential slowdown in industrial activity.
Why it matters
Market reactions to geopolitical developments in the Middle East and cooling US economic indicators suggest shifting global economic sentiment.
Here's our summary of key economic events overnight that affect New Zealand, with news the oil price has taken another large retreat today even though the Red Sea and Strait of Hormuz remain essentially closed. Alternative ways to shift crude oil out of the region are gathering pace and effectiveness. But this big price drop is directly related to Scott Bessent saying a deal with Iran to reopen the Streat is imminent, comments that have moved markets.
But first up today, there was another full dairy auction earlier this morning and prices in USD were virtually unchanged overall (+0.1%), but they did dip in NZD by -0.9% on the higher currency. Of note is the new season volumes offered, very similar to the same event a year ago. But prices are now a full -10% lower this year than then.
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