Oil Recovery Continues

 Crude prices continuing to grind higher as we head into the weekend. The futures market has now risen more than 12% off the weekly lows printed on Monday as news of Trump’s 5-day ceasefire broke. According to Trump, the move was announced on the back of a weekend of negotiations with Iran, which Iran has since denied. The US then submitted a 15-point peace-proposal to Iran which it has rejected for now. Proposed talks in Pakistan have also failed to materialise. Despite Trump continuing to claim that the two countries are locked in talks, Iran is adamant that no dialogue is taking place. Furthermore, news that Trump is considering sending a further 10,000 troops to the Middle East while Iran claims to have mobilised 1 million troops, is further darkening the picture.  

Ground Invasion Risks

While uncertainty around the Iran war remains, oil prices look poised to continue higher for now. There is a chance that peace talks are under way and Iran simply won’t admit that in order to maintain the leverage it is getting from higher oil prices. As such, oil prices are vulnerable to a sharp shift lower if we get any news of confirmed talks underway or a fuller ceasefire. Unless we get that news, however, oil prices look likely to continue higher here and headlines around troop movement should keep the market underpinned with risks of a ground invasion remaining elevated near-term.

Technical Views

Crude

The rally off the 84.60 level is gathering pace with price now back above the 95.06 level. With momentum studies turning higher, focus is on a continuation higher here and a test of the 101.69 range highs next. Above there, 114.44 will be the higher bull target to note.