Jeff Currie says Brent crude oil has become a sentiment-driven contract, detached from fundamentals.

Wall Street veteran points out Brent crude oil has become an “emotion-driven contract”, completely detached from real supply-demand fundamentalsWall Street veteran Jeff Currie stated that the world’s most important oil benchmark futures have now almost become a kind of “emotion-driven contract”, weakening its practical role as a tool for managing price volatility. “All energy-related product prices are rising, but only Brent crude oil has not kept pace,” Currie said in an interview on Thursday. “It has already become detached from the actual conditions of the real market.”Currie is the founder and CEO of the investment firm Real Macro. He mentioned that the current Brent crude price, around $106 per barrel, does not reflect the level of risk facing supply from the Strait of Hormuz to the Black Sea region. Recently, risks in the oil market have further escalated, with frequent attacks on oil tankers in the Strait of Hormuz, intensifying Houthi attacks on Saudi Arabia, and a significant rise in shipping freight rates.Currie pointed out that as the global geopolitical environment becomes increasingly tense, the divergence between Brent crude oil futures and spot market prices is creating “risks that are hard to price”, making hedgers unwilling to use these contracts precisely when they most need them to protect their interests. “These kinds of futures markets play an absolutely critical role in the normal operation of the energy industry in modern society,” Currie said. “If we lose such a pricing mechanism, the industry will not have sufficient investment, and the market will also be unable to make adequate behavioral adjustments to respond to changes in supply and demand.”