Bessent predicts $40 oil post-Iran war, impacting bond yields: Bloomberg

A recent prediction by Bessent, reported by Bloomberg, suggests that oil prices could plummet to $40 per barrel following the conclusion of the Iran war, potentially leading to a decrease in bond yields. Currently, Brent crude oil is at approximately $95.50 per barrel, and the U.S. 10-year Treasury yield stands at around 4.79%. If Bessent’s forecast materializes, it would signify a substantial drop in oil prices, impacting inflation-sensitive markets and possibly altering the trajectory of global energy prices. Market participants appear to interpret Bessent’s prediction as supportive of a scenario where crude oil does not reach a new all-time high by September 30, with the probability currently priced at 1.6% for a YES outcome. This represents a decrease from previous figures, as the market adjusts to the potential implications of significantly lower oil prices on future supply dynamics. The December 31 market shows a 10% probability for a YES outcome, indicating some expectation of a potential catalyst affecting oil prices by year-end. Bessent’s prognostication comes amid a backdrop of geopolitical tensions and market adjustments, with key actors like OPEC’s Mohammad Sanusi Barki...