Brent retraced to around $105.89 a barrel by Thursday morning, down from the $107.77 Tuesday close that arrived with the Iran deadline. [1] WTI sat at $101.34, up 32 cents on the day. [1] The retrace was the headline tape's reading of the Trump-Xi summit's Iran paragraph, which committed both powers in writing to a Strait that remains open and untolled. [2]

The IEA's Wednesday Oil Market Report did not retrace. Global supply fell another 1.8 mb/d in April to 95.1 mb/d, taking cumulative losses since February to 12.8 mb/d. [3] Observed inventories drew at 4 mb/d through March and April — the agency's record. [4] The market will remain "severely undersupplied" until October even if the conflict ends next month. [4]

FXEmpire's technical desk read the chart as a defended pullback to the lower line of the ascending channel that has framed Brent since April, with $107 as the next pivot and $105.55 as the 0.5 Fib level. [5] What the channel does not contain is the structural curve underneath: 14.4 mb/d of Gulf production shut in, more than a billion barrels removed cumulatively, and a 250-million-barrel inventory draw over March and April. [6]

The spot tape moved on Beijing. The curve did not. Brent at $105 or $107 trades the same supply ledger.

-- DARA OSEI, London