JPMorgan Says It No Longer Has A Baseline View On How The Iran Conflict Will End

According to CNBC, JPMorgan has abandoned its attempt to forecast how and when the Iran war will end, with Natasha Kaneva, the bank's head of global commodities strategy, saying the firm no longer has a baseline view and cannot model the conflict's endgame. Kaneva said JPMorgan had initially assumed oil above $100, gas near $5 per gallon and 10-year Treasury yields above 5% would push President Donald Trump toward an agreement to reopen the Strait of Hormuz in June, but the exit strategy is now less clear even though those thresholds have been crossed. She said oil is back above $100, the 10-year Treasury yield moved above 5% this week and diesel is above $6 per gallon and rising, while inventories are at record lows. JPMorgan estimates Brent crude's fair value at $90, but the benchmark is trading near $105 per barrel after nearly touching $110 earlier this week. Kaneva said the market is pricing in the risk of about 4 million barrels per day of additional supply losses on top of the 10 million bpd already disrupted, though she added that inventories remain sufficient to cushion a prolonged disruption for now.