#BrentReturnsTo100

Oil has gone over $100 again. This time it feels like a bigger deal. On Thursday Brent oil settled at $100.69. This is the time it has closed above $100 in two months. It did not happen slowly. The price jumped over 7 percent in one day. WTI oil also went up by 6.2 percent to $92.19. Prompt Brent oil even went higher to over $105.

The reason for this is clear: the Houthi attacks on two oil tankers in the Red Sea. One of the tankers caught fire according to the authorities. At the time there is a lot of pressure on the Strait of Hormuz and the Bab el-Mandeb. These are important routes for oil to be shipped around the world. When both of these routes are disrupted at the time the market reacts very quickly.

There is also a side to this. Trump said that Iran would be held responsible if the Houthi attacks continue. He even talked about targeting bridges and power plants. We do not know if he will actually do this. The market is already reacting to the possibility.

Goldman Sachs thinks that if the problems around the Strait of Hormuz continue into 2027 the price of Brent oil could go to $120 by the end of the year. This is not what most people think will happen. It is a possibility that we can not ignore.

The rest of the market reacted quickly to the news. The interest rate on 10-year Treasury bonds went up to over 4.7 percent. The Nasdaq stock market went down by 2.3 percent. The chance of an interest rate increase in the future also went up.

When oil prices go up it can cause inflation to go up too. This makes it harder to predict what will happen with interest rates. It can be bad for stocks.

My take on this is that I have seen oil prices go up before. This time it feels different. There are problems with two important routes for oil and the political situation is getting worse. This makes it more likely that the high oil price will last for a while.

I am not trying to predict what the oil price will do. I am just watching to see what happens next. I want to see if the physical market, for oil stays tight and if there are any signs that the situation will get better. Until something changes I think the oil price will stay high.

This is just my opinion. I could be wrong. Things can change quickly so it is always a good idea to do your own research.

‍#BrentOil #OilMarket #Geopolitics @Gate_Square