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Brent crude oil prices closed the week at $109.50 a barrel, the highest since May 5 this year. They are up more than 13% from this month’s low and could still have room to rise as the standoff between the US and Iran continues. In addition, a bullish “inverted head-and-shoulders” pattern has formed on the chart, signaling further gains ahead of the summer travel season.
The price of Brent climbed to $109.50, while US West Texas Intermediate (WTI) crude reached $107. The rise came after President Donald Trump warned that he was losing patience with the Iranians after his visit to China.
Trump has expressed frustration that Iran has not responded to his warnings. In a statement last week, he said the current ceasefire was being held “with vital equipment” and hinted that the war could resume.
Close Trump allies have called for a more aggressive approach. Ben Shapiro has called for a strike on Kharg Island, while Mark Levin has supported the use of nuclear weapons. Lindsey Graham and other neoconservatives have also called for attacks on Iran.
However, the reality is that Trump does not seem to want to resume the war. First, his approval rating has fallen sharply in recent months, and a new conflict would worsen the political situation for him.
At the same time, Iran has shown great resilience. A New York Times report last week showed that the Iranians have used the ceasefire to restock their military arsenal.
Restarting the war would be dangerous for Trump
A return to conflict would worsen the situation, as Iran could intensify attacks on neighboring countries such as Saudi Arabia, the United Arab Emirates and Kuwait. Tehran has already identified several potential targets.
Trump is also grappling with rising fuel prices and inflation. US consumer inflation has reached 3.8%, while producer inflation has risen to 6%. A new war would further add to inflationary pressures.
The easiest approach for Trump might be to continue the economic blockade and wait for economic pressure to force Iran to reach a deal. However, US intelligence has signaled that Iran can withstand the economic situation for several more months. This also means higher oil prices for a longer period.
Oil reserves are falling
Meanwhile, most analysts warn of a decline in oil reserves in the US and elsewhere, as countries have tapped strategic reserves to avoid market shortages.
Agencies such as the EIA and IEA have warned that the decline in global reserves is accelerating at an unprecedented pace.
A report released last week showed that U.S. stockpiles fell by more than 4.3 million barrels, to 452 million barrels. The IEA estimates that global stocks are falling by about 4 million barrels a day. All of this is happening ahead of the summer travel season in the U.S., when demand for fuel typically increases sharply.
Technical analysis of the Brent price
The daily chart shows that the price of Brent crude oil has risen sharply in recent days. It has remained above the 50-day and 100-day exponential moving averages (EMAs).
A closer look shows that an “inverted head and shoulders” pattern has formed, known as a bullish trend reversal signal. For this reason, there is a risk that the price will continue to rise, initially towards the level of $115 per barrel. A break above this level could pave the way for further growth towards $119.50, the highest level this year. /Pamphlet/
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