Weekend oil trading and trading on prediction markets of contracts about the Iran war looked hesitant about what President Donald Trump's latest threat will mean for the conflict.
Trump posted Saturday morning that “all hell” will rain down on Iran if Tehran fails to reach a deal and reopen the Strait of Hormuz within 48 hours.
Odds on Kalshi of traffic in the Strait returning to normal by May 15 now remain around where they were before Trump's post at 14%. But odds of opening by June 1 have risen to 30%, up 7 percentage points.
Polymarket showed a mixed reaction. Odds of the conflict ending by May 15 increased to 28% from 25%, while the probability of a resolution by June 30 slipped to 55% from 60%.
Oil outlook
The odds of Brent crude futures (CO1:COM) (BNO) opening above $113.50/bbl Sunday evening after finishing just above $109 Thursday jumped up 21 percentage points to 60%.
IG weekend trading pointed to gains in U.S. oil prices, with WTI moving to just below $108/bbl from around $105 on Thursday. However, a pricing gap remains, with CME WTI futures (CL1:COM) (USO) settling at $111.54/bbl.
There's also a disconnect between the futures contract and the physical price being paid for a barrel of oil. Dated Brent, or the price on barrels bought and sold in the North Sea, topped $140/bbl this past week. That's the highest level since 2008.
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