Crude Spikes As Peace Talks Fail
Oil Higher on Monday
Oil prices are back up over $100 p/b today after the first round of US/Iran peace talks failed over the weekend. While not wholly unexpected, the breakdown in talks suggests that any peace deal is still a long way off, giving no reason for crude prices to revert lower yet. On the plus side, Trump’s reaction so far has been to announce a blockade of the Strait of Hormuz, rather than the heavy assault on Iranian energy sites promised earlier. While the US refrains form any fresh military attacks on Iran, the spike higher in crude should be confined with the market vulnerable to a fresh push lower on any news that talks are set to resume.
Near-Term Risks
The key now will be to see whether Trump’s blockade prompts a return to the negotiating table, or if it sparks a return to a wider conflict. If the latter, oil price could start to push firmly higher again particularly if we hear a more hostile tone from Trump and traders get the sense that the US President could push ahead with plans to hit Iranian energy sites. For now, the market is very much in wait and see mode with plenty of volatility risk seen around incoming news flow.
Technical views
Crude
For now. Crude remains above the 101.69 level and above the bull trend line from YTD lows. While supported here, focus is on a continuation higher and a fresh test of the 114.44 level resistance. 95.06 remains the key support to note with 84.60 the deeper support 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.