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Brent crude oil prices fell by approximately 19% by the end of May 2026, marking the commodity's worst monthly performance since the COVID-19 pandemic. This significant downturn follows diplomatic overtures and negotiations between the United States and Iran, which have successfully eased geopolitical tensions. According to reports, these diplomatic initiatives helped mitigate the market risks that had spiked following the closure of the Strait of Hormuz in April, leading to a sharp reduction in the geopolitical risk premium.
Contextually, the market is balancing geopolitical relief against global manufacturing data. China's Manufacturing PMI reported a reading of 51.8 on June 1, 2026, beating the forecast of 51.4 per market data. Additionally, the U.S. ISM Manufacturing PMI came in at 54 on the same day, surpassing expectations of 53. These figures suggest that industrial demand in the world's two largest economies remains resilient despite the recent price collapse in the energy sector.
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Sign InLooking ahead, Brent prices are testing stabilization levels following the May close. Investors are closely monitoring upcoming catalysts, including central bank commentary following Fed Chair Jerome Powell's speech on May 31, 2026. Market participants will also focus on regional economic health, noting the Eurozone unemployment rate held at 6.3% as of June 1, 2026, which serves as a key indicator for energy consumption trends in the European session.