By: Global financial digest

Oil prices remained steady in Asian trading, with Brent crude futures trading at $77.72 per barrel, up 0.7% as of 0612 GMT.

This comes after a more than 4% drop in the previous session amid potential for a ceasefire between Hezbollah and Israel, dampening geopolitical concerns.

Despite the recent stabilization, Goldman Sachs noted that uncertainty surrounding the Middle East conflict could still drive Brent prices higher by $10 to $20 per barrel if Iranian production faces disruptions.

The investment bank emphasized, however, that without major supply interruptions, Brent crude prices could hold near current levels for the remainder of the quarter.

Last week, the call options implied volatility skew surged to mid-April levels, while Brent implied volatility exceeded its model-implied fair value for the first time this year, Goldman Sachs noted in a report.

The options market is currently pricing in a roughly 5% probability of a $20 per barrel price spike, a scenario that Goldman Sachs estimates could result from a 2 million barrels per day supply disruption lasting six months, without OPEC intervention.

Goldman Sachs’ outlook highlights the role of geopolitical tensions in shaping oil market dynamics, while traders remain cautious as they weigh global demand concerns against the unpredictable developments in the Middle East conflict.