FX.co ★ CL/Crude Oil

Crude Oil Because of the uncertainty surrounding the U.S.-Iran ceasefire, oil prices are still high on Tuesday. WTI oil is about $98, but Brent oil is still strong at $108. Tehran's response to the US offer shows that the market is pricing supply risk and that there are still significant gaps. These consist of the Strait of Hormuz control, reimbursement for war damage, Iranian oil sales, and the U.S. naval embargo. As long as these issues are not resolved, traders will likely continue to maintain a risk premium in oil prices. Crude oil is the main problem facing the world economy. Twenty percent of global oil and LNG transportation passes via the Strait of Hormuz. Thus, if the oil interruption persists in May, it will cause a major catastrophe for the world's economies beginning in June and July. The possibility of turmoil is quite serious because of Iran's fixation on sovereignty over the strait. For this reason, Brent may continue to be above $100 as long as discussions are extended and physical flows are kept to a minimum. Any significant advancement in the peace process has the potential to reduce the conflict premium and necessitate a correction. However, Brent might return to $115 if the blockade is extended or if there is any additional military escalation. The weekly chart below shows that WTI crude oil is still in a volatile range between $80 and $120. The oil crisis, which was brought on by the closure of the Strait of Hormuz, is the reason for the $40 price fluctuation between $80 and $120. This range's midline is still $100. The risk of a spike rises as long as the price stays above $100. However, it indicates that the price is below the critical level as long as it is below $100. If the Strait of Hormuz stays closed and traffic does not return to normal, the oil market will probably experience a significant surge in the upcoming months due to the solid fundamentals. This bullish price movement is supported by the triangle pattern's breakout. Prices will probably move near $150 if they break above $120. The consolidation between $80 and $120 is also depicted in the 4-hour chart below. It has been noted that oil prices are currently contracting within this range's triangular pattern. The likelihood of an absolute breakout above $120 will be significant if prices break above this triangle at $110. Nonetheless, there is a good chance that prices will stay below the $100 mark for the upcoming month if they break below this triangle at $90. However, there is still a lot of uncertainty in the oil market because of the continued geopolitical unpredictability and the world energy crisis. As a result, the market can be influenced by upcoming events in the Middle East.