Brent oil prices rose in early Thursday trading, extending the momentum of the previous session. The war in Iran has, from a financial markets perspective, entered a new phase following the deliberate targeting of Iranian gas fields by Israel and the US, to which Tehran has responded by vowing to disable the region’s energy production infrastructure. These developments have prompted a market reaction, with the pricing-in of higher risks of a prolonged disruption to oil supply from the Persian Gulf. The situation is now more concerning for oil traders because the disruption to global energy markets could extend beyond restricting tanker traffic through the Strait of Hormuz, to impairing the output capacity of one of the world’s most important oil and gas prodution hubs. Against this backdrop, traders will continue to monitor developments closely, with the potential for further volatility in oil prices as news continues to emerge from the region. Any reports of attacks by Iran on neighbouring countries’ infrastructure could trigger renewed price spikes, reinforcing the current upside bias in oil markets.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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