Crude Hits New Highs on US/Iran Escalation
Crude Soars Again
Following a brief correction lower yesterday oil prices are pushing firmly higher again today as traders monitor developments in the Middle East. Widespread retaliatory attacks from Iran across the Middle East, a ground assault from Israel in Lebanon and warnings from Trump that US troops could be deployed to Iran means that supply risks remain in sharp focus for traders on Tuesday. Trump signalled yesterday that the US is prepared to launch a bigger wave of airstrikes on Iran unless the regime backs down and with the threat of a bigger escalation in the conflict, oil prices remain vulnerable to further upside near-term.
Strait of Hormuz Closed
Crude prices are also rallying today in response to news that the Strait of Hormuz has been closed off. With around 20% of the world’s seaborne oil passing through the channel, oil prices look set to push higher. Given the highly volatile environment, the Strait is expected to remain closed for several weeks while this conflict continues, creating severe repercussions for global oil prices. Additionally, news that Iran targeted the biggest oil refinery in the world in Saudia Arabia yesterday, leading to its temporary closure, further underscores the threat to global supply stemming from war in the region. As such, only a walking back of the conflict (Iran to negotiate, US/Israel ceasefire) is likely to see crude prices turning lower again near-term.
Technical Views
Crude
The correction lower in crude found strong support into the 70.48 level with price now back up through yesterday’s highs, testing above the bear trend line from 2025 highs. 78.42 is the next resistance to watch with a fresh breakout seen in line with bullish momentum studies readings.
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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.