Ceasefire Uncertainty Keeps Crude Around $100 p/b
Oil Grinding Higher Again
Crude prices remain in the green today as uncertainty around the US/Iran ceasefire keeps energy prices bid. Attacks from Iran on Kuwait overnight, and warnings from Trump over Iran’s failure to reopen the Strait of Hormuz, mean that investors remain wary of the ceasefire collapsing. There are some positive signs, however. Israel has agreed to commence peace talks with Lebanon after Iran warned that it was breaching the ceasefire with its attacks, drawing criticism from Trump also. Ahead of those talks scheduled next week, Iranian and US delegates are due to hold meetings this weekend. If we hear positive news on the back of these meetings, oil prices could soften next week with the ceasefire looking more solid. However, if talks stumble and the ceasefire looks in peril, we could see oil pushing back up to last week’s highs.
How Quickly Can Supply Recover?
The reopening of the Strait of Hormuz has been flagged as the major issue for crude prices going forward. However, even once the Strait reopens, the real issue is how quickly oil supply can return to pre-war levels. This is unlikely to happen unless we get a proper peace deal agreed to put an end to the conflict, but even then, it is still likely to take some time given the damage to energy infrastructure in the region and the willingness of producers to step up distribution given residual war risks. As such, oil prices could remain around higher levels for longer.
Technical Views
Crude
The sell off in crude has stalled for now into the 95.06 level. However, price remains capped by the 101.69 resistance, which remains the ley near-term pivot. If we break lower, 84.60 is the deeper support to note while 114.44 sits above as the next bull target if we spike higher.
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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.