Recently, I’ve come across a rather concerning phenomenon: behind the rise and fall of international oil prices, there are actually deeper pressures facing the global economy.

At the beginning of this month, WTI crude oil stayed steadily above $100 for several consecutive trading days, and market sentiment was bullish. But what’s truly worrying isn’t how high oil prices rise, but that the “second-order effects” brought by high oil prices are gradually starting to show. The US April CPI rose 3.8% year over year, reaching the highest level since last year; the PPI also accelerated to 6%, rising month over month for eight consecutive months. This means that inflationary pressure has spread from energy prices to the entire production system, and service-sector inflation has also hit a four-year high.

Under these circumstances, the market has begun reassessing the Federal Reserve’s policy direction. Previously, everyone was betting on rate cuts; now, instead, there is a 50% probability of a rate hike once within the year. US Treasury yields have rebounded accordingly, and the 30-year Treasury yield has touched 5%. These changes have triggered market concerns about financial risks.

Geopolitical risks also lurk. US-Iran negotiations have stalled, while global oil inventories are falling rapidly. JPMorgan expects that, in developed countries, commercial crude oil inventories could reach their limit as early as early June. If the blockade continues into June, mechanisms that previously helped cushion oil price shocks may start to fail. Once volatility in oil price fluctuations further feeds into wage growth and inflation expectations, the Federal Reserve may be forced to choose to raise interest rates.

From a technical perspective, the WTI crude oil daily chart shows that prices have recently continued to consolidate above $100. In the short term, if it keeps holding at this level, investors should be alert to the possibility that further rebounds could test 108 or even 115 dollars. May 26 and June 10 are especially worth watching.

Honestly, international oil prices are currently in a pattern that’s easy to push up but hard to push down, and the market does not yet seem to have fully priced in the potential upside risks. If there is no clear progress in US-Iran developments before June, the volatility in oil price movements could intensify further, and the impact on the global economy should not be underestimated.