Swiss bank UBS raised its Brent forecast on Tuesday. It now expects the benchmark to stay near $110 a barrel until the end of the year, up from $100, Reuters reported. UBS cited volatile Middle East supply and geopolitical uncertainty.
Why UBS changed its Brent forecast
Traffic through the Strait of Hormuz has risen, UBS said. Yet attacks on ships have also increased. Moreover, the risks could grow if US naval support wavers.
Meanwhile, the Houthis said on Tuesday they had hit Saudi Arabia’s Ras Tanura refinery, the kingdom’s biggest, with a ballistic missile. So far, there has been no Saudi confirmation.
Prices eased on talks
Even so, oil fell for a second day. By 1311 GMT, Brent was down $1.00, or 0.86%, at $114.81. Likewise, WTI was down 78 cents at $100.98. Iranian officials agreed with Saudi Arabia, Turkey and Pakistan to keep talking, state media said.
Still, SEB said prices carry “a significant risk premium” for a possible US or Israeli attack on Iran. In addition, traders watched Israel’s election on Tuesday. Read our report on Monday’s move.
For a deeper analysis, read: Brent Forecast at $110: How Much of Today’s Price Is Risk Premium?
