Oil Market Unmoved by Trump's Policy Shifts
Despite a flurry of policy changes from President Trump, the oil market remains largely unfazed. Implied volatility for Brent futures has dropped to its lowest since July, reflecting traders' reduced uncertainty about oil prices.
Analysts attribute this apathy to the overwhelming amount of policy announcements and the realization that social media posts can significantly impact the market. Consequently, traders have decreased their risk exposure.
Despite sanctions against Russia and OPEC+ production cuts, the market has remained relatively stable. The availability of spare capacity mitigates supply concerns, while potential deals with Russia and Iran have tempered price surges.
Brent futures have hovered around $75/barrel, with a narrow trading range of less than $4 in February. Speculative net-bullish positions have declined, indicating waning confidence in price rises. Additionally, open interest for WTI is at its lowest since November, and trading volumes have dropped from January highs.