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Oil Risk Premium Wanes |
The easing of tensions between Israel and Iran is one of the reasons that the geopolitical risk premium in crude is shrinking.

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Oil prices have dropped by $10 per barrel in the last month, falling from over $90 Brent in early April to the low $80s. The decrease in prices is due to subsiding tensions in the Middle East, leading money managers to shift their focus to upcoming OPEC+ decisions and the path to lower interest rates. The war premium in crude oil prices has declined, and traders are now selling petroleum futures and options at the fastest pace since October 2023. Analysts are now looking at the upcoming OPEC+ meetings and the Fed for clues about global oil supply and demand. The market is also focusing on factors that can affect fundamentals, as traders expect spikes and corrections to follow throughout the summer and beyond.