Oil prices are jumping to exceed 110 dollars per barrel, with WTI reaching 110.73 dollars while Brent is at 107.97 dollars, up by 16.5%.
Shipments through the Strait of Hormuz have decreased by 90% amid the conflict with Iran, raising severe concerns about supply disruptions affecting 20% of global oil flows.
Both Iraq and Kuwait and the UAE are reducing their production due to export disruptions, exacerbating supply constraints and price volatility.
Market overview
WTI crude breaks the key resistance level at $110, testing a 261.8% Fibonacci extension with strong upward momentum
There is critical support in the $105–106 range; a breakout below could lead to a rebound towards the psychological level of $100
The relative strength index is approaching the overbought zone above 70, indicating the possibility of a short-term consolidation before the next move
The increase in volume confirms the breakout; continuous trading above $110 targets a range of $115–120
Bollinger Bands are expanding rapidly, indicating rising volatility and the potential for drastic moves in direction
The fundamental driving factors
The conflict between Iran and Israel escalates as airstrikes hit oil storage facilities in Tehran, raising concerns about supply disruptions
The Iranian Revolutionary Guard threatens to target energy infrastructure in the region, warning that the price of oil could reach $200 per barrel
G7 finance ministers coordinate the release of strategic oil reserves with the International Energy Agency to stabilize markets
The United States announces a $20 billion reinsurance program for oil tanker ships in the Strait of Hormuz with naval protection to restore flows
OPEC+ is considering an emergency release of 3.5 million barrels per day of spare production capacity to alleviate the supply crisis
Trading strategy
Traders should consider accumulating at dips in the $106–108 range with stop-loss orders placed below $104
Recommendation to set position sizes: exposure should be limited to between 20–25% of capital due to geopolitical uncertainty
Warning about risks
Geopolitical escalations could push oil prices to $150–200 per barrel within a few weeks, raising concerns about a global recession
Traders with high leverage should reduce their positions to 3 times or less; with strict stop-loss orders set at $104 to manage liquidation risk
