Crude Higher As Iran War Heats Up Again
US/Iran Attacks Intensify
Oil prices are continuing to push higher at the start of the week as traders navigate the breakdown of the US/Iran ceasefire. The US has now carried out attacks on Iranian sites for nine consecutive days with Iran responding in kind by attacking US military sites in neighbouring countries. Over the weekend, two US servicemen were killed in an Iranian attack on an airbase, which traders fear will lead to a further escalation in the conflict. As such, risks remain pointed higher for crude prices this week with oil likely to jump on any incoming news of further attacks.
Strait of Hormuz Closed Again
Along with the uptick in hostilities, Iran has vowed to keep the Strait of Hormuz closed, putting focus back on supply disruption in the region. Oil flows had been gradually rising again through the turn of the month, reflected in lower oil prices. However, with tensions boiling over and Iran once again closing the shipping route, crude prices look vulnerable to a sharper push higher. Near-term, only a very unexpected stepping down from both sides and a reaffirmation of the peace process is likely to help temper the rally in oil prices. Indeed, the bigger risk is that hostilities escalate further and oil pushes back up into the $90s.
Technical Views
Crude
The rally in crude has seen price breaking back above a few key levels with price now testing the big 84.60-mark. This is a major pivot for the market which, of broken, will turn focus back to 95 next, in line with bullish momentum studies readings. To the downside, 77.65 is the local support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.