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OIL: Crude Continues Rally As Concerns Of A Strike On Iran’s Oil Grow

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Oil prices continued to rally as markets wait for Israel’s retaliatory strike on Iran and conflict with Hamas and Hezbollah continued. Despite America’s advice to avoid Iran’s oil infrastructure, there is a significant risk that an Israeli retaliation will target it and impact supply. The USD index was unchanged on Monday.

  • WTI rose 3.9% to $77.29/bbl, after a high of $77.40, to be up 13.4% in October. It broke through resistance at $76.40 and approached the next level of $77.70. It has started today around $77.35.
  • Brent rose above the $80 mark yesterday. The benchmark is up 3.9% to $81.12/bbl, close to the intraday high of $81.16, and 13.2% higher this month. It broke above resistance at $79.68, August 26 high, opening up $81.47. The clear break of the 50-day EMA suggests Brent could continue higher.
  • There were no signs of a reduction in fighting with rocket attacks on Israel from Iran-backed Hamas, Hizbullah and Yemen’s Houthis on Monday, while Israel struck southern Lebanon and Gaza. Markets are concerned that following Iran’s attack on Israel last week, that the OPEC member will become more involved in the conflict thus risking supplies.
  • Goldman Sachs estimates that Brent could increase to the $90s if Iranian oil production was impacted, according to Bloomberg. It also expects up to $40bn of crude purchases by algorithm traders in this scenario. They have been bearish on oil until recent events.
  • On Tuesday China’s head economic planner will hold a press conference and additional government spending will be hoped for.
  • Also on the supply-side Hurricane Milton poses a threat to Gulf of Mexico production. Chevron has evacuated a platform. 
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Oil prices continued to rally as markets wait for Israel’s retaliatory strike on Iran and conflict with Hamas and Hezbollah continued. Despite America’s advice to avoid Iran’s oil infrastructure, there is a significant risk that an Israeli retaliation will target it and impact supply. The USD index was unchanged on Monday.

  • WTI rose 3.9% to $77.29/bbl, after a high of $77.40, to be up 13.4% in October. It broke through resistance at $76.40 and approached the next level of $77.70. It has started today around $77.35.
  • Brent rose above the $80 mark yesterday. The benchmark is up 3.9% to $81.12/bbl, close to the intraday high of $81.16, and 13.2% higher this month. It broke above resistance at $79.68, August 26 high, opening up $81.47. The clear break of the 50-day EMA suggests Brent could continue higher.
  • There were no signs of a reduction in fighting with rocket attacks on Israel from Iran-backed Hamas, Hizbullah and Yemen’s Houthis on Monday, while Israel struck southern Lebanon and Gaza. Markets are concerned that following Iran’s attack on Israel last week, that the OPEC member will become more involved in the conflict thus risking supplies.
  • Goldman Sachs estimates that Brent could increase to the $90s if Iranian oil production was impacted, according to Bloomberg. It also expects up to $40bn of crude purchases by algorithm traders in this scenario. They have been bearish on oil until recent events.
  • On Tuesday China’s head economic planner will hold a press conference and additional government spending will be hoped for.
  • Also on the supply-side Hurricane Milton poses a threat to Gulf of Mexico production. Chevron has evacuated a platform.