Oil Surges Past $73 as Mideast Tensions Mount

1. Oil Surges Past $73 as Mideast Tensions Mount

Crude oil prices trade above $73 as Israel and Iran tension escalates. It hit an intraday high of  $73.63 and is currently trading around $73.47.

The growing conflict between Israel and Iran has caused a significant increase in oil prices, as concerns about the Strait of Hormuz, affecting one-fifth of the world's supply and accounting for 20% of global LNG, continue to rise. Despite no actual disruption to oil flows, Brent crude and WTI have both experienced a surge of more than 4%, with prices peaking at approximately $76.45 and $74 per barrel, respectively, due to concerns about inflation and potential disruption. The global economy could be severely impacted by a prolonged closure of the Strait, which is the only marine passage for Gulf states to access markets, with oil prices potentially rising above $100 per barrel and risk premiums such as market instability and political unrest.

Price Resistance and Support Levels

The near-term resistance is around $74; any breach above this level could push prices higher to  $74.30/$75/$76.07/$78. On the downside, immediate support is at $73, violation below targets  $72.10/$70.65/$69.60/$68.60/$66.65/$65.

 It is good to buy on dips around $73 with a stop-loss around $71.80 and a target price of $76/77.