Crude Spikes Back Above $100 p/b
Trump Threatens Iran Escalation
Oil prices are on watch today after an explosive move higher in response to aggressive rhetoric from Trump overnight. Crude futures had fallen firmly over the prior two sessions following Trump’s announcement that the US would likely be ending operations in Iran within 2-3 weeks. However, the market spiked higher by almost 10% this morning following Trump’s comments in a national address yesterday warning that the US would hit Iran with everything it has before the war ends.
Mixed Signals From Trump
Ahead of those comments, oil prices were falling on the view that Middle East supply would likely return to normal sooner-rather-than-later after the US ends its war. However, with Trump threatening to escalate the conflict further before ending it, traders are worried about the fallout from the move, sensing that it will take much longer to return to pre-war conditions (if at all).
Big Volatility Risks
The moves in oil today should remind traders just how volatile the situation is and how sensitive markets are to incoming news flow. As such, the near-term view for crude is very clear: any further hostile rhetoric from either side, or news that the war is escalating, will drive oil prices highs. However, any softening in tone from Trump, or news of a breakthrough in negotiations, should see oil prices cooling and reversing lower again.
Technical Views
Crude
Following a correction back inside the 84.60 – 101.69 range yesterday, crude prices are now back above the level and threatening to break higher still. While above the range highs, focus is on a test of the 114.44 level next with the YTD highs just above. If we do break back into the range, 95.06 will be the first support zone 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.