Crude oil forecast: WTI could return to $100 amid re-escalation
Oil prices are rising once more as Trump warns Iran has to pay the price for taking too long to negotiate. Despite jawboning the oil market lower earlier this week, it looks like the situation is deteriorating unfortunately and oil prices could start climbing towards $100 once again.
Written by
Fawad Razaqzada
Market Analyst
Oil prices are rising once more as Trump warns Iran has to pay the price for taking too long to negotiate. Despite jawboning the oil market lower earlier this week, it looks like the situation is deteriorating unfortunately and oil prices could start climbing towards $100 once again. Risk appetite is also faltering with stocks, gold and crypto dropping. US CPI, up next, could also add to the jitters if it proves to be hotter than expected. Meanwhile US crude stockpiles are being drawn down sharply. All this points to a tightening market just as the driving season is upon us. I can't see how oil prices are going to fall from here without a deal. Against this backdrop, the risks to our crude oil forecast remain tilted to the upside.
Trump walks back on earlier optimism
After declaring that a deal could be withing 2-3 days, the US president has just poured cold water on the optimism and accordingly, oil prices are rebounding.
This is what Trump posted earlier:
Iran’s Military is a complete and total mess. Much of it, like their Navy and Air Force, doesn’t even exist anymore - They have been completely defeated. Iran is all talk and no action. The Bully of the Middle East is DEAD!!! They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!! President DONALD J. TRUMP
The Fake News Media refuses to report how EFFECTIVE the U.S. Naval BLOCKADE is, the most successful Blockade in the history of Naval Warfare. NOTHING GETS THROUGH unless we want it to. IT IS A STEEL WALL! Iran is doing ZERO business, not paying their military, or any of their bills, and quickly becoming a FAILED NATION! Lots of oil is getting out. Praise be to Allah! President DONALD J. TRUMP
Technical crude oil forecast: WTI ready to break higher again
WTI had been declining inside what appears to be a falling wedge pattern (bullish continuation), before finding support from the trend of this pattern today. It still needs to break $88.80 - $90.00 resistance to trigger a move towards the resistance trend of the pattern near $92.50. The most recent high is at just below the $94.00 level. Break that and oil could head back towards $100.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
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