Oil futures opened for the week in what will surely be the most-closely followed market today and for the next few weeks.
WTI crude jumped 11% to $74.57 ($75.33 was the high print). Brent is trading up about 8% after briefly touching $82.37. It’s taken only seconds for some selling to kick in.
The war was heavily front-run and I suspect we will see profit-taking as the dust settles.
There are mixed signs about what is being targeted in Iran as some say there have been strikes on Kharg Island, which is Iran’s main loading facility but that hasn’t been confirmed. Trump himself say the US attacked more than 900 sites and Israeli media puts the number of strikes above 1200 so it’s going to be very tough to get an accurate read on what’s been hit.
There are also reports that three US/UK oil tankers were hit by the IRGC but those reports are sketchy. We have seen many reports and pictures of Iranian strikes throughout the region as they seemingly attack every country with a US military presence (and maybe more).
There is a big fog of war here so the market’s reaction is always to seek safety. I just don’t know if there are many oil shorts to squeeze though as there’s likely a $5-8 per barrel premium in crude.
Closing levels in the crude curve on Friday versus 3 minutes into trading:
- April $67.02 —–> $72.41
- May $66.89 ——> $71.91
- June $66.56 ——> $71.06
- July $66.18 ——> $70.40
- December $63.79 —— $66.20
This is from Javier Blas:
Largest one-day % price increases for Brent by close of the day (excluding 2020 Covid period):
- 16/09/2019: 14.6% (Abqaiq attack)
- 06/08/1990: 14.05% (Kuwait invasion)
- 23/03/1998: 13.77% (OPEC output cut)
- 07/01/1991: 13.71% (Desert Storm)
- 14/01/1991: 13.63% (Desert Storm)
In the stock market, S&P 500 futures are down 0.8%
This article was written by Adam Button at investinglive.com.