Crude Oil Price News and Forecast: WTI Crude Oil Prices Jump as Middle East Tension Escalated
|WTI bulls bail-out at spoke highs, expecting Persian Gulf crisis deescalation
The price of West Texas Intermediate had spiked through trendline resistance in a speculative move following the U.S.’s killing last week of a top Iranian general. However, in more recent trade, the price has pulled back and is currently trading -0.35% at the time of writing as investors bet that the incident might not have a lasting impact on crude values while both Iran and the US will not seek an outright war.
The US should know too well that Iran is not a friendly nation, for it has allies all over the world and the constant ratcheting up of war fever can only end in disaster for both sides. For that reason, markets are of the view that the Purgoin Gulf crisis will be de-escalated on a multinational anti-war front.
"While the world is watching for Iran's response, which many fear could trigger an escalation in tit-for-tat aggressions, markets are also reacting to clashes in Libya – which pose a serious threat to oil production. We caution against expectations for a sensational response from the Iranian regime, expecting instead that any response will be well measured as both sides seek to protect their core interests", analysts at TD Securities explained. Read more...
Crude Oil Prices Jump as Middle East Tension Escalated
Crude Oil prices jumped by more than $2 after US drone strike killed top Iranian general. Fears mount that Iran may target the oil industry infrastructure across the region in the event of further tit-for-tat escalation. Last year, there were precedent that Iran or its proxies targeted oil facilities and shipment. Iran has seized two oil tankers in the Strait of Hormuz. Additionally, Iran-backed Houthi rebels also claimed responsibility for the drone attack which crippled Saudi’s oil facility. The drone attack has forced Saudi Arabia to shut down half of its production. It has also caused the biggest jump in global oil prices since 1988. The latest development raises the prospect that Iran intensifies its retaliation.
The geopolitical conflict also prompted global stock markets to pullback from the recent rally. Traditional safe haven instrument such as Gold and government bonds enjoy newly-found bid after the pause since summer of 2019. Over the weekend, Iran said it would no longer be bound by uranium enrichment restriction in 2015’s nuclear deal. The U.S State Department has said there’s a heightened risk of missile attacks near military bases and energy facilities in Saudi Arabia. Oil continues the volatile swing as President Trump tweeted on the weekend that the US is ready to strike 52 Iranian targets in disproportionate manner if Tehran retaliates. Read more...
WTI comes under pressure near $62.30
The barrel of WTI is trading on the defensive for the first time after three consecutive daily advances, including Monday’s fresh tops in the vicinity of the $65.00 mark, levels last seen in April 2019.
The rejection from recent peaks comes after US-Iran tensions ebbed somewhat in past hours, while at the same time traders continue to re-assess the potential for supply disruptions, all adding to the renewed cautious tone surrounding the black gold.
Also weighing on crude prices, trade concerns appear to have re-emerged after Chinese news agency said the country would be in no hurry to sign the ‘Phase One’ deal (originally scheduled on January 15th).
Later in the day, the API will publish its report on US crude oil supplies ahead of the EIA’s report expected on Wednesday. Read more...
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