Bullish Risks Rising For Crude As Trump Threatens Bigger Attack
Oil Surges
Crude oil prices are on course to end the week back above $90 p/b following a further push higher yesterday. The futures market topped out just ahead of the $94 mark before softening through early European trading today. The rally this week comes amidst a clear escalation in hostilities between the US and Iran with the US yesterday conducting its 13th consecutive day of strikes on Iran. Meanwhile, Iran has continued to hit US target in neighbouring countries with both sides ruling out a return to peace talks near-term.
Trump Threatens Iran
Indeed, markets are now facing the prospect of a further escalation in the conflict after Trump yesterday threatened “major military punishment” against Iran in the coming days. This threat from Trump was in response to attacks on Saudi oil tankers in the Red Sea form Houthi rebels aligned with Iran. Trump vowed to increase the severity of attacks against both Iran and the Houthis if any more attacks take place there.
Bullish Risks
With risks of a further escalation in the conflict seen, oil prices look poised to continue higher near-term. Only a dramatic stepping down form both sides is likely to help blunt the current rally and that appears firmly an outside scenario for now. Near-term, incoming headlines will be key with any fresh attacks set to boost oil further.
Technical Views
Crude
The rally in crude has seen price breaking out above the bear trend line from YTD highs before stalling into a first test of the 95.06 level. While price holds above 84.60, focus is on a continuation higher with 104.26 the next bull target 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.