Oil Higher As Ships Attacked By Iran
Fresh Ship Attacks
Oil prices are trading a little higher on Tuesday morning following news of attacks on commercial ships near the Strait of Hormuz. This is the latest in a string of attacks on commercial ships in the area, some attributable to the IRGC and some from unknown sources. While the Strait is technically open during the 60-day negotiations window aimed at delivering a peace deal, distribution through the Strait has only returned in part as a result of the ongoing security risks there.
US/Iran Peace Talks
For now, peace talks between the US and Iran continue with hopes a that a proper peace agreement can be established. Crude prices have fallen heavily over the last month following news of the interim deal and current 60-day ceasefire/negotiations window. However, if we start to move closer to the end of that window and a deal is still not looking likely, crude prices could start to rally again as traders fear a return to war or at least ongoing disruption in the Strait of Hormuz.
Other Factors
Away from US/Iran negotiations, the broader outlook remains bearish for crude. Recovering Gulf exports, the ongoing unwinding of OPEC+ production cuts and the recent news that Saudi Arabia has cut its August selling prices, should be enough to keep crude prices anchored lower barring any dramatic escalation in US/Iran tensions.
Technical Views
Crude
The sell off in crude has seen the market breaking down below the 7076 level, though the move has stalled ahead of 65.38 and the bull trend line off last year’s lows. While some further corrective action is feasible, focus remains on a fresh push lower while price remains sub-70.76.
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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.