Oil Pushing Higher

Oil prices are surging higher again today with crude futures now back up above the July highs, testing the 95.06 level. The move comes amidst rising hostilities between the US and Iran, leading to a fresh drop in traffic through the Strait of Hormuz. Yesterday, President Trump sought to reassure global markets saying that oil prices would ‘drop precipitously’ once the US wins the war with Iran. Writing on Truth Social, Trump forecast oil to fall below $2 or $3 per gallon.

Tensions Reignite

Fighting has resumed this week between the two sides after almost a month of paused attacks. There had been some rising optimism that the two sides were moving back to a place where peace talks could resume. However, following Iran’s rejection of the US’s proposal around its nuclear energy program, which Iran called ‘illogical’, fighting has resumed specifically around the Strait of Hormuz where tankers have reported coming under fire this week. Against this backdrop, oil prices look poised to continue higher for now with any further news of fresh attacks likely to amplify the current buying we’re seeing. On the other hand, it would likely take a shock announcement that both sides are stepping down, and recommitting to the negotiations table, in order to drive crude prices lower from here.

Technical Views

Crude

The rally in crude has seen the market pushing back up above the August highs, now testing the big 95.06 resistance level. This is a major pivot for the market and a break back above this level will be firmly bullish, signalling a push higher towards 104.26, in line with bullish momentum studies signals.