August 12, 2024 23:17 GMT
Geopolitical Risk Premium Increases As Middle East Prepares For Iran’s Response
OIL
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Oil prices rose sharply on Monday as a geopolitical risk premium was priced in again driven by escalating tensions in the Middle East with a strike from Iran or Hezbollah on Israel expected soon. Israel’s IDF has been put on “peak alert”, according to the WSJ, and the US is increasing its presence in the region. Jordan and Saudi Arabia have refused to allow Iran to use their air space for an attack. The USD index rose 0.2%.
- WTI rose 3.7% to $79.66/bbl after breaking above $80 briefly to a high of $80.16. It is currently stable around $79.68. It broke through the 50-day EMA and resistance at $78.88 opening up $82.27, July 18 high.
- Brent is up 3% to $82.05/bbl after a high of $82.40. The benchmark broke above the 20- and 50-day EMAs opening up resistance at $84.66, July 18 high.
- With the focus on geopolitics, the market looked through OPEC’s downward revision to global demand expectations for 2024 and 2025. The IEA publishes its report today.
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