Brent crude climbed back to $100 for the first time since May, gaining almost 12% on the week as supply threats struck three separate shipping corridors at once. ActionForex says the next move across markets now depends on whether Brent, Treasury yields, the Dollar and equities break five key technical levels.
Global oil supplies are under pressure from three directions at once, and Brent crude returned to $100 for the first time since May with a weekly gain of almost 12%. The threat now reaches well beyond the Strait of Hormuz.
The United States has conducted 13 consecutive days of strikes against Iran, with diplomatic prospects still remote. Meanwhile, Houthi attacks on Saudi tankers in the Red Sea threaten the alternative export route that had helped reduce dependence on Hormuz. In the Black Sea, attacks linked to the Russia-Ukraine conflict forced the Caspian Pipeline Consortium to suspend crude loadings, disrupting the overwhelming majority of Kazakhstan’s oil exports.
Depleted inventories raise the stakes
Markets are confronting these disruptions with far less room for error. Global oil inventories have been substantially depleted in recent months, leaving the market less able to absorb interruptions than it was earlier this year. As a result, the combination of thin buffers and three simultaneous threats raises the risk that temporary disruptions become a sustained supply shock.
Brent leads the repricing
Brent remains the most important signal because it is the source of the current risks rather than a reaction to them, directly reflecting how traders weigh physical oil supply against demand. Technically, the rally reached the 61.8% retracement of the 119.50-to-70.14 decline at 100.64. The broader risk stays skewed higher as long as pullbacks hold above the rising 55-day EMA at 87.35, and a sustained break above 100.64 would open the way to a retest of 119.50.
Five levels to watch
Beyond oil, ActionForex points to yields, the Dollar and equities for confirmation. The 10-year Treasury yield has broken above 4.700, with the next hurdle at 4.798.
The Dollar Index has so far delivered a restrained response to the oil surge. It continues to trade below resistance at 101.87. On Wall Street, the DOW set a record high at 53,294.33 before daily momentum began to weaken.
If those markets follow oil higher, the move would point to a broader inflation shock rather than another passing geopolitical flare-up.
Source: ActionForex
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