Oil posted its biggest daily drop in nearly six years as investors anticipated a resumption of flows through the Strait of Hormuz and a de-escalation of inflationary pressures.
Oil Crash – Historic Daily Decline
The most dramatic movement was in the oil market. U.S. light crude (WTI) fell as much as 19% intraday, the biggest daily drop in six years. Losses were then pared slightly, but the price is still down 16% at $94.47 a barrel.
Brent crude followed suit, falling as much as 16% to close at $92.21 a barrel. The sharp decline reflects a shift in market expectations as a two-week ceasefire agreement and Tehran's commitment to safe shipping ease fears of major supply disruptions.
It is worth noting, however, that US crude oil remains more expensive than Brent, a somewhat paradoxical feature of the last period
