Oil: Gradual easing base case – OCBC

FXStreetJun 3, 2026 7:04 AM

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OCBC’s FX Strategists Sim Moh Siong and Christopher Wong reiterate their Fragile Oil Balance view, stating that Brent has fallen below USD100/bbl on ceasefire optimism but remains supported by elevated geopolitical risks and Hormuz vulnerability. Prices are capped by weaker Chinese demand and strong US exports, yet the bank’s base case still sees Oil easing into 2H26, with stickiness from structural risk premia and stockpiling.

Brent capped but downside limited

"Ceasefire optimism has pushed Brent below USD100/bbl, but geopolitical risks remain elevated and price downside is limited by ongoing supply uncertainty and Hormuz vulnerability."

"Prices are capped by weaker Chinese buying, strong US exports and inventory drawdowns, though this buffer is temporary and could fade within months."

"Our base case remains for prices to ease into 2H26, but stickiness persists due to structural risk premium, stockpiling and Iran’s capacity to disrupt flows."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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