Master of Crypto
Crypto Market Intelligence Publisher
Oil has crossed $108 a barrel because Middle East supply routes are under threat and flows through the Strait of Hormuz have fallen from about 9M to below 2M barrels a day. Higher oil could push inflation up again, delay rate cuts and keep money tight, which could hurt crypto in the short term if liquidity stays weak. x.comÂ
Crude oil should fall once a deal ending the war is agreed, along with bond yields. Markets are pricing a Fed hike rather than a cut, so a cut would be the surprise, and a recession is unlikely this year given trillions of dollars in capex spending. x.comÂ
Oil's slide from $120 during the war to $79 should continue as the US-Iran deal, due to be signed on the 19th in Switzerland, reopens the Strait of Hormuz and ends the US naval blockade, restoring choked supply. Cheaper oil lowers US inflation and flips the market from expecting another hike toward rate cuts, lifting risk assets. The deal is only a 60-day MOU, though, and Israel is the problem: if anything blows up, oil rips and the chain runs in reverse. x.comÂ
A possible US strike on Iran poses near-term upside risk for crude oil. If Trump expects to lose the midterms, he may act between Israel's October 27 election and the November 3 US vote. Crude has filled the $101 gap and reached the rising channel's midpoint; if it keeps breaking higher, the next levels are $105, $110 and the channel top near $115. x.comÂ
Oil will come down significantly, because Trump will eventually make a deal with Iran and put the conflict to bed. x.comÂ
Sustained high energy prices strain US farming, logistics, manufacturing and consumers, so crude oil should fall dramatically from its elevated level. Middle East and Russia tensions are lifting WTI, shown near $103, while Trump will likely step in at some point to reduce uncertainty. x.com x.comÂ
Crude oil and the XLE energy-sector ETF would be buys on a pullback because uncertainty over a real military strike could hang over the US market from the midterms through year-end. Only an actual strike or a true peace deal would settle that uncertainty. x.comÂ
Oil looks set to fall whichever way the Iran war goes. If it escalates, the US takes over Iran's oil; if it de-escalates, the US says Iran wants to talk. x.com x.comÂ
Crude oil faces near-term pressure as Trump said US-Iran talks were productive and pledged no strikes before the November 3 elections; Brent fell to $103.36. Supply risks persist, however, with attacks on tankers near the Strait of Hormuz and 1.3 million barrels a day of Gulf of Mexico production shut in ahead of Hurricane Isaias. x.comÂ
Oil traders anticipate a resumption of the Iran war after the midterm elections, favoring more upside for crude oil. After a bullish reversal off its 10-week moving average, the odds favor a continuation of the rally to the $110-120 range. x.comÂ
The pause in attacks until the November 3 midterms is the catalyst for the next leg up in risk assets, including bitcoin, US small caps and long-dated Treasuries. x.comÂ