Oil prices rose for the fifth consecutive day as concerns grew that the US and Iran were making little progress in resuming talks to ease tensions, leaving the Strait of Hormuz effectively closed.
Brent crude, the global benchmark, rose more than 1% to above $106 a barrel, with a year-to-date increase of about 75%. With the closure of the strait disrupting the flow of Middle East oil to the rest of the world, Brent crude is on track for its biggest weekly gain since the first week of the war.
With hopes for easing tensions in the Middle East dashed and replaced by concerns over a possible escalation, both the yield on the 10-year US Treasury note and the Bloomberg Dollar Index are set for their first weekly gains in a month. Stock markets were mixed, with Asian stocks volatile, while Nasdaq 100 futures rose 0.7% after Intel issued a strong earnings outlook.
Although risk premiums have eased in recent weeks, investors remain cautious ahead of the weekend, with market sentiment hinging on whether tensions in Iran will escalate or be defused through diplomatic channels. Traders will closely monitor signals from Washington and Tehran as well as shipping movements for clues on energy supply risks. Any disruption in the Strait of Hormuz could lead to high oil prices and put pressure on global economic growth.
According to several officials familiar with the diplomatic efforts to end the war in Iran, US President Donald Trump’s threats and reckless social media posts have hindered the prospects of Iran agreeing to more face-to-face peace talks with the United States.
Despite Trump’s statement that Israel and Lebanon would extend the ceasefire for three weeks, the situation in the Middle East remains highly tense. The US military boarded a supertanker carrying Iranian oil in the Indian Ocean, while the US Navy has intensified its blockade of Iran’s maritime transportation. Tehran continues to effectively block the Strait of Hormuz, preventing the passage of hundreds of millions of barrels of oil and fuel as well as other commercial traffic.
“Oil prices will be supported as long as the flow of oil through the strait remains restricted, the market continues to tighten and inventories keep falling,” said Giovanni Staunovo, an analyst at UBS in Zurich.
Technical analysis:
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Gold: Yesterday, the price rebounded significantly after sweeping through the liquidity in the yellow zone, but failed to fully stabilize in the key price range of 4700-4720. To see a further rebound today, it is necessary to clearly recapture the above-mentioned price range. We will wait for a breakthrough today and then give a blue pullback buy operation. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: Our predictions on the Nasdaq over the past three days have been almost all accurate. After the price dropped below 26,580 yesterday, it rebounded strongly by about 400 points. For today, we suggest that those who have held long positions for the past three days take partial profits. If you want to open new positions today, we only recommend looking for small stop-loss breakout opportunities with a bullish engulfing pattern when it breaks above. For specific positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The price has not broken down as expected, but has instead swept above the $100 mark again. We remain in an observing stance, waiting for the signal of a breakdown to appear. We will consider selling only during the pullback. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key financial data and events to focus on:
22:00 The final reading of the University of Michigan’s Consumer Sentiment Index for April in the United States
22:00 US One-Year Inflation Rate Expectations for April (Final)
