Crude Bounces Back Following Monday Sell-Off
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Fresh Volatility in Crude
Oil prices are rising again today following a brief correction lower yesterday as traders continue to monitor incoming headlines on the Iran war. Calls from Trump for a naval coalition to help secure the Strait of Hormuz were ultimately rejected, stoking investor uncertainty as the war continues to rage with no sign so far that negotiations or a ceasefire are forthcoming. Crude futures had slipped more than 9% lower yesterday, perhaps in response to optimism that the Strait might be secured. However, with the shipping channel remaining closed for now, crude prices look likely to continue higher with news of fresh attacks from Iran on UAE neighbours adding to uncertainty.
Near-Term View
Looking ahead, crude prices look vulnerable to fresh upside while the war persists. Any fresh escalation in the conflict, particularly news of any ships being attacked, should see crude spike higher. Only news of a ceasefire, or news that the two sides are moving towards a ceasefire/negotiation, is likely to see crude prices moving meaningfully lower. This view is furtehr endorsed by the recent IEA reserves release of a record 400 million barrels, which has done nothing to cool prices so far, showing how firmly the focus is on the continued violence in the Middle East.
Technical Views
Crude
The latest push higher in crude was capped yesterday into a fresh test of the 4101.69 level, with price reversing back down towards support at the $95.06-mark. This area is holding for now, keeping the focus on a continuation higher. However, range-bound activity looks more likely for now until we see afresh catalyst for a directional push with from news of an escalation in the conflict (bullish) or optimism around a ceasefire (bearish).
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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.