Crude Oil Perpetual Futures Jump: Technicals Points to More Gains as US-Iran War Escalates
Perpetual futures linked to crude oil jumped on Hyperliquid amid fears that the US-Iran war will escalate in the near term. West Texas Intermediate (WTI) soared to $82.2, with the 24-hour volume hitting $157 million. Brent futures soared to $87, up by 25% from its lowest point in June.
Crude Oil Prices Jump Amid Fears of US-Iran Escalation
Energy prices are trending higher following reports that the United States and Iran are escalating their attacks. The US carried out another round of strikes on key Iranian targets, including a desalination plant and several bridges.
President Trump has also warned that the US will target bridges and power plants next week. According to Axios, the administration has also deployed additional aerial refueling aircraft to Israel.
Iran, on the other hand, has responded by hitting neighboring countries, with Kuwait receiving most of the attacks. A desalination plant in Kuwait was destroyed. Iranian leaders have warned that all countries in the GCC will continue receiving attacks as long as the US is escalating its attacks.
The implications of all this is that traffic through the Strait of Hormuz has waned in the past few days. Data shows that only 10 ships crossed the Strait in the last 24 hours, with 444 others waiting. Oil companies are afraid of coming under Iranian attacks.
All this is happening at a time when oil inventories are falling in the US and other countries. A report by the Energy Information Administration (EIA) showed that inventories dropped by 1.7 million barrels last week. This drawdown was higher than the expected 900,000.
Energy executives have warned that the market is close to running on empty, especially if China resumes its large-scale buying. One oil trader told the FT that:
"We’ve burned through all of the buffers we had. Everything. All of that’s now gone."
In the same report, Energy Aspects’ Amrita Sen, noted that the oil market had 400 million barrels of excess inventories excluding the strategic petroleum reserves before the war started. She said:
"Now we have close to nothing. Market complacency around Hormuz flows is being severely tested."
Technicals Points to More Oil Gains
The four-hour chart shows that Brent has continued rising this weekend, and is now trading at its highest level since June 12. It has moved above the key resistance at $83.67, its highest point on June 21.
Oil has also moved above the 50-period moving average and the upper side of the bullish pennant pattern. It was also the upper side of the cup and handle pattern.
Therefore, the path of the least resistance is bullish, with the next level to watch being at $90. A move above that level will point to more gains, potentially towards $100.
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