Brent falls more than 2%, to 76 dollars, amid inflation and demand fears

London.- The price of a barrel of Brent crude for September delivery fell more than 2% this Thursday, settling at around $76, as inflationary fears and crude demand concerns offset the upward risk from the latest escalation of tensions in the Middle East.

North Sea Brent crude, the European benchmark, closed at exactly $76.30 at the end of the trading session on the London futures market, which implies a decline of 2.20% -or $1.72- compared to the previous day’s settlement price, when it finished at $78.02.

Brent crude gave up ground following Wednesday’s significant rally—of more than 5%—due to the latest escalation of attacks between the U.S. and Iran in the Middle East, as inflationary outlooks and economic slowdowns in major powers like the United States and China reignited investors’ fears of a drop in crude demand.

You can also read: Brent rises 1%, above 95 dollars, pending negotiations between the US and Iran

Although US President Donald Trump ended the truce with Iran and carried out a new series of attacks against the Islamic republic, the market is confident that Washington and Tehran will resume peace talks.

In this context, market analyst Fawad Razaqzada stated this Thursday in a commentary on the Forex.com website that investors have become accustomed to geopolitical conflicts “dissipating almost as quickly as they arise“.

However, he stressed that although Trump tried to reassure the markets by suggesting that Tehran remained open to negotiations, the risk premium associated with crude oil has already increased and traders are on alert “for any threat to maritime transport” in the Strait of Hormuz, which would immediately force a revaluation of inflation expectations.