Crude Breaks Range Highs As Trump Mulls Ground Assault
Middle East Risks Intensify
Oil prices are on watch at the start of the week as heightened tensions in the Middle East add to supply risks. Over the weekend, the Houthis joined the war against the US and Iran attacking Israel while threatening ships in the Red Sea. This is a major threat for oil prices as Saudi Arabia has been using the Red Sea to bypass the Strait of Hormuz and continue shipping up to 6-million barrels a day. If this supply come sunder attack, oil prices could push firmly higher near-term. Additionally, rising risks of a US ground assault in Iran are also adding to uncertainty. Reports over the weekend that Trump is considering sending in US troops to take hold of Iranian oil facilities are creating fresh upside pressure in crude.
Conflicting Signals from Trump
However, as with last week, the market is still dealing with conflicting signals. Writing on X overnight, Trump reported that negotiations with Iran are going ell with Iran agreeing to allow 20 oil vessels through the Strait of Hormuz starting from tomorrow. However, with negotiations unconfirmed by Iran and the US continuing to attack targets in Iran, there is a lot of confusion over the situation. While the market is suffering a lack of clarity, oil prices look poised to push higher particularly if we get any headlines suggesting that a ground assault is getting closer.
Technical Views
Crude
The gap higher today saw the market testing above the 101.69 range highs which have capped price over the last month. Price is still atop the level for now, though down from initial highs. If bulls can hold above here, focus is on a move back up to 114.44 next. If we break lower again, 95.06 is the next support to note.
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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.