WTI oil prices eased in early European trade after, earlier in the session, rising above $67 for the first time in six months. The price of the barrel has gained almost 5% so far this week, supported by heightened concerns over the possibility of a large-scale US military strike on Iran. The build-up is increasingly ominous, with a second US aircraft carrier group approaching the Middle East as talks between the two parties fail to produce any meaningful progress. One of the likely consequences of a full-scale military confrontation in the Persian Gulf would be the closure of the Strait of Hormuz to maritime traffic, effectively disrupting oil supplies from one of the world’s leading producing regions. Against this backdrop, crude traders have begun hedging against the risk of a sudden reduction in global supply, increasing positions in futures contracts in a dynamic that could create scope for further price gains, especially if tensions continue to escalate.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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