• Oil prices are soaring above 100 USD/barrel, with WTI reaching 114 USD and Brent surpassing 113 USD, marking the highest levels since 2022

  • Brent crude has risen by more than 30% and WTI has recorded a 35% increase since the escalation of the conflict, while shipments through the Strait of Hormuz are almost halted

  • Regional production cuts exceed 4 million barrels per day, as the UAE, Kuwait, and Iraq reduce their output due to storage limitations

Market overview

  • Gasoline prices in the U.S. are rising significantly, as analysts predict that the national average could reach 4 USD if oil remains above 100 USD

  • The market shows extreme contango, with short-term delivery prices higher than those of future months, indicating a severe supply shortage

  • The tightness of the WTI-Brent spread in a contango market signals an extreme short-term shortage that traders must monitor

Main driving factors

  • The conflict between Iran, the U.S., and Israel is becoming a regional crisis with attacks against the UAE and Saudi Arabia, threatening to close the Strait of Hormuz

  • The disruption of the Strait of Hormuz directly affects 20% of the world's oil supply, with Asia, including India and China, being the region most exposed to acute risks

  • JPMorgan estimates that regional production cuts could exceed 4 million barrels per day, as storage facilities reach their maximum capacity

Trading strategy

  • The psychological level of 100 USD now acts as crucial support; a break could retest 93 USD, while resistance is at 105 USD

  • Key targets extend to 123 USD and 130 USD if 120 USD is surpassed, although a bearish Engulfing pattern suggests a potential shift in sentiment

  • Consider a strategy of buying WTI and selling Brent, while closely monitoring the support at 100 USD for potential moves towards 150 USD

Risk warning

  • The geopolitical shock generates stagflation concerns, where rising inflation combined with slower growth could delay central banks' rate cuts

  • G7 nations could coordinate the release of strategic oil reserves to alleviate physical shortages, which could potentially trigger sharp price pullbacks

  • High volatility demands caution, as extreme price changes, from 114 USD to 100 USD, demonstrate rapid reversals; use stop-loss orders adjusted below 95 USD$BTC

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