S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- WTI trades with a positive bias during the Asian session, though it lacks bullish conviction.
- Rising US-Iran tensions keep geopolitical risk premiums in play and support the commodity.
- Concerns about supply disruptions in critical waterways back the case for additional gains.
West Texas Intermediate (WTI) – the benchmark US crude oil price – edges higher during the Asian session on Friday, though it remains confined within a multi-day-old range. The commodity currently trades around the $79.35 region, up 0.50% for the day and close to a one-month high set on Tuesday, and seems poised to register gains for the second straight week amid the risk of a further escalation of US-Iran tensions.
The US military carried out a sixth consecutive night of air strikes against Iran on Thursday and also struck an empty oil tanker headed for Kharg Island as part of its renewed naval blockade on Iranian ports. Meanwhile, Iran carried out attacks on US military facilities across the region, raising fears of a return to all-out war and keeping the geopolitical risk premium in play. This is seen as a key factor that continues to act as a tailwind for crude oil prices.
Meanwhile, officials in southern Iran’s Bandar Abbas reported that civilian infrastructure – including power facilities and a train station – has been hit. Iran’s Islamic Revolutionary Guard Corps had threatened to expand the conflict by targeting additional regional energy supply routes. Furthermore, Reuters reported that Iran has asked Yemen’s Houthis to stand ready to close the Red Sea oil route, posing a potent new threat to global energy supplies.
This, along with a drop in shipping traffic through the Strait of Hormuz, lends additional support to crude oil prices and backs the case for further gains. However, it will still be prudent to wait for some follow-through buying and a sustained breakout through a multi-day-old range before placing fresh bullish bets on the commodity. Meanwhile, the fundamental backdrop suggests that any corrective pullback is more likely to be bought into and remain cushioned.
