Oil has rebounded towards US$100 a barrel after one of its sharpest declines this year, keeping Australian energy stocks and inflation expectations firmly in focus.
Brent crude recovered more than 4% to around US$98.40 after falling roughly 15% over three sessions.
The earlier decline was driven by growing expectations that the US political landscape could increase pressure for a diplomatic resolution to the conflict involving Iran.
That rapidly reduced the geopolitical premium embedded in crude prices.
For Australia, lower oil prices would provide some relief through cheaper fuel and transport costs, potentially helping offset some of the pressure from higher interest rates.
The impact on equities is more mixed.
Producers such as Woodside Energy and Santos benefit from stronger realised energy prices, while airlines, freight operators and other fuel-intensive businesses generally gain when crude falls.
The sharp rebound shows the market remains extremely sensitive to geopolitical headlines.
With Brent again approaching US$100, energy prices remain an important variable for both the Australian inflation outlook and the earnings of major ASX energy companies.
