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Over the last two trading sessions, WTI crude oil has once again displayed a notable bearish bias, with prices falling nearly 6%. Part of this renewed selling pressure has been driven by recent developments in the Middle East, which have helped temporarily ease the geopolitical tensions that had supported the oil risk premium in previous weeks.
Crude oil prices rose more than 3% by mid-day in London, causing stocks and bonds to drop. Prices have rallied after Trump said Iran had been given an opportunity to reach a deal but had failed to take it. But now Trump said an unprecedented economic operation against Iran will be underway, warning of severe economic consequences for countries providing support to Tehran.
Crude oil prices continue to press higher amid the ongoing standoff between the US and Iran. While the softness in US and Chinese data of late does point to some moderation in demand, oil prices remain predominately supply-driven.
Crude oil Weekly Outlook: Crude oil remains supported as markets balance recovering supply against persistent Strait of Hormuz risks. Key WTI levels define escalation and de-escalation scenarios.
The oil market has opened the week with some relief on the supply side after the United States and Iran paused military strikes over the weekend - How long will it last?
Fear has reappeared in oil prices but so far, stocks appear to have escaped unscathed. But matters can change quickly in global macro.
These remain relevant sessions for WTI crude oil, which has recorded an increase of just over 14% on average over the last 5 trading sessions. This behavior indicates that the buying bias remains important in the short term.
Crude oil prices rose more than 2.5% on Tuesday, extending their recent recovery. Reports that commercial vessels transiting the Strait of Hormuz had come under attack, reminded markets that geopolitical risks in the Middle East remain far from being resolved completely. Markets are also wary of a still tight market and the expected buying of oil to fill up emergency stocks.
Crude oil continues to face difficult trading sessions in the short term. Over the last 5 trading sessions on average, WTI remains down close to -3.5%, with consistent movements below the 70-dollar area. This continues to highlight a selling bias that has remained in place for several weeks.
Crude oil extends weekly losses past 7% as Hormuz reopening optimism outpaces actual supply flows, pushing WTI toward a critical support test at $74. Razan Hilal, CMT, Market Analyst at FOREX.com, explains the key technical levels and what a sustained break below $74 could mean for oil prices.
Crude Oil Weekly Outlook: Crude oil remains below key support and the multi-month consolidation range as markets assess a potential US-Iran peace deal. Explore key levels and scenarios ahead.
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.
And just like that, oil prices gave up the entire near-6% weekly gains by afternoon trading in London. Crude oil traders had been pricing in disruptions to Iranian oil in recent days amid concerns about military action in the country by the US. But it looks like Trump has decided against that - at least for now - and traders have accordingly reduced the risk premium priced in oil.
