Crude Rallying on Resurgent Middle East Tensions
Middle East Shipping Attacks Rise Again
Crude prices are on the climb again today as traders nervously eye the recent uptick in shipping attacks in the Strait of Hormuz. Oil flows through the channel had been steadily rising amidst the broader rebound we’ve seen recently in output from the Middle East. Fresh exchanges between Saudi Arabia and Yemen following a recent wave of Houthi strikes against Saudi are also complicating the picture leading to fresh uncertainty.
Fresh US/Iran War Fears
This uncertainty is also being exacerbated by fears that the US is on the brink of a fresh escalation in its war with Iran. Traders are responding to news this week that Trump has reportedly ordered the Pentagon to prepare strike options against Iran which could be actioned ahead of the US midterms. It had previously been thought that Trump would lay off fresh attacks until after the elections. However, speaking this week, trump warned that he wasn’t interested in a peace deal with Iran and was instead prepared to go harder against them.
US Output Hit by Storm
Alongside worrying developments in the Middle East, traders are also eyeing a tropical storm which has led to the closure of oil sites in the Gulf of Mexico, shutting in around half a million barrels a day currently. If the storm persists this should see oil prices continuing to rise near-term.
Technical Views
Crude
The futures market is today bouncing off the bull channel lows with focus now on a fresh test of the 95.06 level. If bull can get back above there, 104.26 will be the next bull target to note. If we break lower, however, 84.60 is the key 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.