Crude Rises Despite Ceasefire Extension
Oil Pushing Higher Again
Oil prices remain in the green today despite news from US President Trump yesterday that he will extend the current ceasefire with Iran. Trump had previously vowed not to exte3nd beyond this deadline but has taken the decision as he awaits a ‘unified proposal’ for peace form the Iranian regime. Despite the ceasefire being extended, there is a great deal of uncertainty regarding the status of the Strait of Hormuz. Trump has said the US blockade of the Strait will continue, while additionally there have bene reports this morning that Iran fired on a UK container ship in the Strait even after the ceasefire was extended. As such, oil prices have not reacted in the same way they did to the last ceasefire extension, reflecting a greater degree of scepticism among traders at this point.
Volatility Risks Remain High
With the Strait of Hormuz still closed off and tensions in the area remaining elevated, oil prices look poised to continue to recover higher as traders price in risks of the ceasefire breaking down. Both sides have warned of severe consequences if a deal is not agreed. Traders will now be awaiting incoming news on the situation but risks remain high with Iran currently saying it will not re-enter negotiations unless the US ends the blockade on the Strait. If tensions continue to mount and the ceasefire looks in danger, oil prices could move sharply higher again.
Technical Views
Crude
For now, crude continues to push higher as the recovery above 84.60 gathers steam. Above, 95.06 is the key level to watch with any break of that level seen turning focus back to the big 101.69 marker. To the downside, 84.60 is the key support to watch with 77.65 below if we see any chock turn lower in response to news of a breakthrough in peace talks.
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