Oil Prices Rise on US-Iran Tensions but May Face Correction

Oil prices surged to $106.09 per barrel for November-delivery Brent futures and $93.29 for WTI after concerns over a new escalation between the US and Iran.

According to Standard Chartered analysts, record long positions held by Commodity Trading Advisors (CTAs) have limited potential to continue supporting oil price growth.

The bank believes that systematic buying has been exhausted, requiring an additional physical shock to the market for prices to rise further, such as infrastructure damage or a prolonged reduction in flows through the Strait of Hormuz.

However, Standard Chartered also warns of a risk of correction if flows normalize or Saudi Arabia restores export volumes, potentially causing prices to decline due to unwinding of crowded long positions by funds.