Barclays Recommends Going Long Brent Call Spreads

Jan 30 (Reuters) - BARCLAYS:

• RECENT PRICE ACTION AFFIRMS OUR VIEW THAT GEOPOLITICAL TENSIONS POSE ASYMMETRIC UPSIDE RISKS IN OIL MARKETS.

• US-IRAN TENSIONS REMAIN ELEVATED. ONGOING SHUTTLE DIPLOMACY MIGHT HELP OVER THE NEAR TERM, BUT THE RHETORIC DOES NOT SUGGEST A CLEAR SUSTAINABLE PATH TO DIPLOMACY YET.

• RECOMMENDS BUYING $70/B MINUS $75/B CALL SPREADS IN DECEMBER 2026 BRENT FUTURES ($1.60/B AT THE TIME OF WRITING)

• SAYS MARKET REACTION HAS SO FAR AFFIRMED OUR VIEW THAT GEOPOLITICAL TENSIONS POSE ASYMMETRIC UPSIDE RISK TO OIL PRICES, WITH BRENT CLIMBING ABOVE $70/B, HIGHER THAN IT WAS BEFORE THE ONSET OF THE 12-DAY WAR LAST YEAR.

• REITERATES BASE CASE THAT IT LIKELY FIZZLES OUT WITHOUT MAJOR IMPLICATIONS FOR SUPPLY AND PRESENT A FRAMEWORK FOR THINKING ABOUT THE POTENTIAL RISK OF A SUPPLY DISRUPTION