Synopsis:

Danske Bank provides an analysis of the near-term outlook for the global oil market, noting its resilience in the face of recent geopolitical tensions. Despite Iran's missile and drone attacks on Israel, Brent crude prices have remained stable around USD 90 per barrel. Danske predicts a stabilization in Brent prices at approximately USD 85 per barrel in the near term, influenced by OPEC+ capabilities and potential U.S. actions regarding strategic oil reserves.

Key Points:

• Current Market Stability: Brent crude has demonstrated remarkable stability, maintaining around USD 90 per barrel even amid recent geopolitical upheavals and a significant rally in previous weeks. This stability underscores the market's robustness against geopolitical shocks.

• Role of OPEC+: OPEC+ plays a crucial role in maintaining price stability, possessing significant excess capacity to mitigate potential price spikes. This capacity is particularly vital in scenarios where geopolitical tensions could otherwise lead to price escalations.

• U.S. Strategic Options: The U.S. holds strategic levers that could influence oil prices, including the potential tightening of sanctions on Iranian oil exports or adjustments to the U.S. strategic petroleum reserves. These measures could involve halting purchases or even selling from the reserves to counterbalance disruptions in global oil supplies.

• Impact on Oil-Linked Currencies: The anticipated stabilization of oil prices is expected to cap the near-term upside potential for oil-linked currencies, such as the Norwegian Krone (NOK). This effect reflects the direct relationship between oil price movements and the economic outlooks of oil-exporting nations.

Conclusion:

Danske Bank anticipates a period of relative stability in oil prices, with Brent expected to average around USD 85 per barrel in the near term. This forecast is based on the market's current resilience, strategic capacities of OPEC+, and possible interventions by the U.S. in its oil reserve strategies. Investors and policymakers should monitor these developments closely, as they have significant implications for global energy markets and related currencies.