US-Iran Conflict Escalates Again, Brent Crude Breaks Back Above $90
The conflict between the US and Iran has escalated again, causing Brent crude prices to break back above $90 a barrel. This development comes after more than a month of tensions between the two countries.
The latest incident involved the US military conducting airstrikes on two rocket launchers on Larak Island in Iran, which resulted in casualties according to Tehran. The US claimed it was a preventive strike to protect commercial shipping from Iranian mine-laying rockets. However, Iran denied this narrative and responded with its own missile attack on US targets in Jordan.
Michael Alfaro, chief investment officer at Gallo Partners, believes the new round of clashes underscores the fragility of the ceasefire and demonstrates that Iran retains the capability to disrupt free passage through the Strait of Hormuz. He also notes that as long as this threat persists, it will be difficult for the geopolitical risk premium to fade entirely from oil prices.
From a technical perspective, Brent crude has broken above its 20-day moving average and 60-day moving average, indicating a short-term bullish trend. The Relative Strength Index (RSI) currently stands at 54.42, above the neutral 50 line, suggesting that upward momentum is recovering.