Oil prices fall in anticipation of peace deal

A ceasefire agreement between the United States and Iran appears to be within reach. Both countries have confirmed that an agreement has been reached which should pave the way for negotiations on a final settlement. Oil and gas prices are already pricing in the prospect of such a deal.A barrel of Brent crude traded at $93.10 last Wednesday. By the end of the week, the price had fallen to $87.33. At the time of writing (Monday afternoon, 15 June), Brent crude stands at $82.64 per barrel, a decline of more than 11% compared with last Wednesday.Since the US and Israeli air strikes on Iran on 28 February, oil prices have risen sharply. On 2 January, a barrel of Brent crude was still priced at $60.75, with expectations that oversupply would place further downward pressure on the market. However, the conflict involving Iran has driven prices significantly higher. The highest level recorded in recent months was $118.03 per barrel on 29 April.According to mediator Pakistan, a memorandum of understanding is due to be signed in Switzerland on Friday, 19 June. It remains unclear what exactly the document will contain, but the ceasefire – which has been violated repeatedly – is expected to be extended by sixty days, during which further negotiations will take place.Iran is demanding that hostilities between Israel and Lebanon also come to an end. In addition, the Strait of Hormuz must once again become safe for maritime traffic, while the United States is expected to lift its blockade of Iranian ports. Iran wants sanctions against the country to be removed, while for the United States it remains crucial that Iran never acquires nuclear weapons.Although oil prices have fallen, they remain at a relatively high level, around 37% above where they stood at the beginning of the year. It remains unclear whether oil tankers will soon be able to pass freely through the Strait of Hormuz without restrictions or additional charges. Such a development would almost certainly have a major impact on oil prices.Diesel prices also declineDiesel prices are falling alongside oil prices, albeit at a somewhat slower pace. On Monday, 15 June, buyers were paying €152.29 per 100 litres (for volumes of 4,000 litres or more). On Thursday, 11 June, the price stood at €161.51, before dropping to €156.04 on Friday, 12 June. Since Thursday, diesel prices have therefore fallen by almost 6%.Gas prices fall more sharplyNatural gas prices have declined more significantly. Last Wednesday, 10 June, gas was trading at €49.99 per MWh. By Friday, the price had fallen to €46.77, and at the time of writing it stands at €42.79 per MWh. Compared with last Wednesday, gas prices have dropped by more than 14%.The fill level of Dutch gas storage facilities remains relatively low but has nevertheless increased to just over 21%. Across Europe, gas storage facilities are now more than 44% full. A year ago, the respective fill levels were just over 41% in the Netherlands and 53% across Europe.ElectricityOn the Epex Spot market, electricity prices fluctuated between €114.33 per MWh on 10 June and €29.43 per MWh on 13 June.