WTI soars over 8% after Iran conflict chokes the Strait of Hormuz

Dhwani Mehta FXStreet

West Texas Intermediate (WTI) opened the week on Monday with a massive gap of over 5%, accelerating its upside to break through the critical $72 mark.

The tremendous buying pressure around the US oil is solely attributed to the escalating geopolitical conflict between the United States (US) and Iran, actively supported by Israel.

The US and Israel orchestrated strikes on Iran on Saturday, plunging the Middle East into a new war and prompting the Iranian Islamic Revolutionary Guard Corps (IRGC) Navy to announce the stoppage of shipments through the Strait of Hormuz. More than 20% of global oil is moved through the Strait of Hormuz.

“Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway,” per Reuters.

Looking ahead, the upside risks in Oil prices remain intact as US President Donald Trump vowed to continue combat military operations in Iran until all of America’s objectives are achieved.

Though the initial jump in WTI could be reversed if profit-booking takes over in the day ahead, with traders awaiting more updates on the US-Iran war.

Meanwhile, markets could also digest the news that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed a modest oil output boost of 206,000 barrels per day (bpd) for April, which was higher than the analysts’ expectations.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

USD/JPY extends losses below 158.00 on hawkish BoJ repricing

USD/JPY extends losses below 158.00 in Asian trading on Thursday. Asian traders react negatively to the weak US ADP report, smashing the US Dollar across the board and exerting renewed selling pressure on the pair. Meanwhile, hawkish BoJ expectations and intervention risks continue to lend support to the Japanese Yen, rendering it negative for the major.

AUD/USD ranges above 0.7150 despite upbeat Chinese PMI

AUD/USD struggles to capitalize on the previous day's bounce from a nearly two-week low and ranges above 0.7150 in Asia on Thursday, as dismal Australian trade data counter upbeat China's RatingDog Services PMI. However, the pair's upside remains in check as the US Dollar stalls the weak ADP report-led slide amid escalating US-Iran tensions and firming September Fed rate-hike bets.

Gold looks to reclaim $4,450 on the road to recovery

Gold is building on its recovery from four-week troughs below $4,300, with buying aiming to recapture the key near-term resistance at around $4,450 early Thursday. Gold buyers seem to be back in the game after the daily technical setup turned in their favor after flashing bearish signals earlier in the week.

XRP defends key support, XLM awaits breakout as derivatives strengthen

Ripple (XRP) and Stellar (XLM) show divergent technical outlooks as traders assess whether the recent weakness could give way to a recovery. XRP is finding support and defining a key support zone, while XLM slips below a cluster of Exponential Moving Averages (EMAs).

US President Donald Trump: Renewed campaign against Iran will not continue for too long

US President Donald Trump said that while the US is prepared to strike Iran again at any time, he doesn’t expect the renewed fighting to last “too long,” Reuters reported on Wednesday. Iran’s Supreme Leader Mojtaba Khamenei said that Iran’s armed forces have “unforgettable lessons” in store for the US in his first message since fighting resumed after a month of relative calm.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.