EBC Markets Briefing | Oil extends losses as Warsh debut signal hawkish shift

Oil prices fell in early trading on Thursday after the US and Iran signed an interim agreement that would end the Iran war, reopen the Strait of Hormuz and waive sanctions.

The Fed held interest rates as expected after Kevin Warsh's first meeting in charge of the central bank. Trump repeatedly pushed the former chairman Powell to cut interest rates.

"New bond king" Jeffrey Gundlach said his emphasis on price stability lowers the risk that the Fed will pursue overly accommodative policies that could reignite inflation.

The oil supply shock has eroded global demand for crude and a lasting resolution to the conflict could drive a surge in supply volumes, thus triggering a major oil overhang next year, the IEA said.

Nevertheless, the agency warned that a full recovery may not be immediate. Observed global inventories fell by 143 million barrels in May, accelerating the 74-million-barrel draw in April.

While China drew from its massive crude oil reserves in May, the reduction was far smaller than its drop in imports—which hit an eight-year low—would suggest.

EBC Financial Group analyst said Brent crude was approaching a critical support level around 50 SMA and showed signs of significant oversold exhaustion. A moderate rally above $79 seems likely.

Asset recap

As of market close on 17 June, among EBC major products, Applied Materials shares led gains after Citi has raised the price target for Applied Materials from $550 to $710 and maintained a "Buy" rating.

Equifax plunged as a broad selloff hammered consulting services peers. But analyst sentiment has not deteriorated, suggesting few fundamental cracks in the business model.

Barclays says gold's 20-25% correction since the Middle East conflict escalated is a positioning reset, not a structural break, and reaffirms its $4,791 forecast for 2026.

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