By Crude oil prices are attempting to rebound today after suffering their biggest drop in over two months on Monday. Brent, the global benchmark, rose to $105.22, a little above Monday’s low of $103.47. West Texas Intermediate (WTI) climbed to $97.10 from Monday’s low of $95.
The next few days will be crucial for both benchmarks as President Donald Trump weighs major strikes on Iranian targets.
Trump launches limited strikes against Iran
Brent and the WTI rose after the United States launched attacks on Iran’s Qeshm Island as part of a series of limited strikes that Washington has carried out in the past few weeks. Unlike in the past, Trump and the US military have not confirmed these attacks in a bid to maintain lower oil prices.
The next few days will be important for oil prices because Trump will determine whether to start major attacks or not. In statements this week, Trump has talked about a potential deal with Iran, but analysts caution that it could be because of the midterm elections.
The outcome of these elections will have an impact on his decision-making. If Democrats sweep, as expected, Trump may decide to launch more attacks to distract the public on Republican losses. On the other hand, if Republicans win, Trump may see that as a validation of his war strategy and intensify the attacks.
In a statement this week, Tucker Carlson, who was once close to Trump, warned that Trump could use a tactical nuclear weapon against Pickaxe Mountain. It would be the first time that a country has used such a weapon since World War 11.
Tucker noted that a nuclear weapon was the only way for the US to destroy Iran’s nuclear site in Pickaxe Mountain. Neither the Mother of All Bombs (MOAB) nor the Massive Ordnance Penetrator (MOP) can access the nuclear site, which is buried deep underground.
Iran, on the other hand, has warned that it will respond harshly to these attacks. It warned that it will attack Israel’s Dimona nuclear site if the US attacks the Pickaxe Mountain. Also, officials have warned that they will attack civil infrastructure, including oil and gas terminals.
As a result, analysts at Goldman Sachs hiked their targets. They expect Brent prices to jump to $105 from $90 and the West Texas Intermediate to move from $90 to $94. The statement said:
“With the timing and location of disruptions nearly impossible to predict, our base case now includes a 1mb/d global supply disruption allowance in 2027.”
Crude oil price technical analysis
Brent crude oil price chart | Source: TradingView
The daily chart shows that the Brent crude oil price has done well in the past few months. It jumped from $70.26 in July and peaked at $117 last week. It has now retreated and moved slightly below the ascending trendline that links the lowest swings since July.
Brent has remained above the 50-day Exponential Moving Average (EMA). Therefore, there is a likelihood that the price experienced manipulation on Monday, which may lead to more gains in the near term. If this happens, the next level to watch will be at $110.
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