Oil prices rose for a second consecutive day as geopolitical tensions flared up again after the US shot down an Iranian drone near a US aircraft carrier in the Arabian Sea.
Brent crude oil prices rose to around $68 a barrel after climbing 1.6% on Tuesday, while West Texas Intermediate crude oil prices were close to $64 a barrel. The conflict has unsettled the oil market, but US President Donald Trump reaffirmed that the two sides are still engaged in diplomatic dialogue. White House Press Secretary Carolein Leavitt also confirmed that the US-Iran talks are still scheduled for Friday as planned.
Meanwhile, according to the American Petroleum Institute, U.S. crude oil inventories dropped by 11.1 million barrels last week. If the official data released on Wednesday confirms this figure, it will be the largest weekly decline since June.
Another sign of escalating tensions is that an oil tanker flying the US flag was harassed by Iranian vessels in the Strait of Hormuz, a vital global trade route. The US Central Command said that the Islamic Revolutionary Guard Corps of Iran “harassed” the tanker “Stena Impero”, which was part of the US military’s fuel procurement program.
Saul Kavonic, a senior energy analyst at MST Marquee, said: “The conflict between drones and oil tankers has highlighted to the market the volatility of the situation and how events could spiral out of control even unintentionally.” He estimated that due to “expectations of a possible US attack on Iran”, there would be a geopolitical risk premium of $5 to $10 per barrel in oil prices.
Despite signs of an increasingly severe oversupply, concerns over any conflict in the Middle East, which produces about one-third of the world’s crude oil, still pushed up oil prices last month.
Technical analysis:
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Gold: The price continues to recover from the decline since around 5600, and has now reclaimed the 5000 mark. As the active short selling was limited last Friday, the correction and rebound may continue. For today, if the price breaks upward directly, it can be participated in appropriately; at the same time, be prepared for a pullback to the 4880-4900 range. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq Composite Index: Affected by the poor performance of technology stocks, the Nasdaq Composite Index fell back above 25,000 again overnight. The grand narrative of the US technology sector is hard to sustain, and Nvidia’s additional investment in OpenAI is also shrinking. Despite the decent earnings reports from the Big Seven this week, the market is not convinced. For today, it is recommended to maintain a strategy of looking for rebound signals after low-sweeping for liquidity, but pay attention to the position around 24,900. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, we already reminded in the plugin that if the previous box range upper limit is broken through, you can arrange for a pullback buy operation. For today’s trading, it is suggested to keep the possibility of fluctuations. Wait until the price retracts to around 63, and then look for a long signal. 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:
18:00 Eurozone January consumer price index preliminary value
21:15 US January ADP Employment Change
23:00 US January ISM Non-Manufacturing Purchasing Managers’ Index
