WTI Oil Futures Surge Back into 'War Range' Amid Ongoing US-Iran Tensions
Oil prices have rebounded strongly after hitting pre-war lows in early July. The recent rally has propelled WTI crude oil futures back into the 'war range' between $85 and $105 per barrel, as identified by Tom Essaye of the Sevens Report. This price action was fueled by a squeezy rally, driven by market optimism that the US and Iran would make progress on peace talks.
The hopes for a lasting ceasefire were dashed, however, with failed efforts by Oman and Iran to strike an independent agreement. As a result, oil prices continued their upward trajectory, with WTI futures closing 5.2% higher on Monday. The geopolitical uncertainty surrounding the situation has left market risks skewed in favor of oil bulls.
Looking ahead, the ongoing supply dynamics are becoming increasingly dire due to the effective standstill of oil tanker traffic through the Strait of Hormuz. Until there is clarity on when Hormuz may reopen for free trade, WTI is expected to trade between $70-$75 and resistance from $95-$100.