Crude oil prices reached $107.40 yesterday, the highest level since April 7, 2026, and are currently trading near $100. Oil prices have also surged by about 64% since the beginning of the year to date, outperforming other global financial assets such as equity indices, global bonds, other commodities, the US dollar index, and cryptocurrencies.
The main reason behind this notable increase is the continued uncertainty and lack of clarity surrounding geopolitical tensions in the Middle East, in addition to the ongoing closure of the Strait of Hormuz. This has led to the shutdown of 178 refineries worldwide and the US naval blockade on Iranian ports, resulting in persistent supply tightness. This situation could push oil prices toward the $120 level, which was recorded in March of this year. It is worth noting that during the outbreak of the Russia-Ukraine war, crude oil prices reached $138 per barrel, and expectations suggest that it is not unlikely to see these levels again.
On the other hand, the OPEC+ alliance decided in its latest meeting to increase oil production by 206,000 barrels per day, with the increase set to take effect starting in May 2026.
The Executive Director of the International Energy Agency stated that 13 million barrels of oil per day have been lost from global supply, and that Europe has lost 100% of its jet fuel supplies. With the continued closure of the Strait of Hormuz, this could lead to stagflation and energy rationing.
From a technical perspective, crude oil continues to show a positive alignment of the 20, 50, and 200-day moving averages, all trending upward. The 20-day moving average remains above the 50-day average, while the 50-day average is above the 200-day average, supporting the bullish trend in crude oil. The Relative Strength Index (RSI) is currently around 52, reflecting positive momentum in oil prices. Meanwhile, the MACD indicator shows convergence between the MACD line and the signal line, and any bullish crossover between them could support the continuation of positive momentum in oil prices in the coming period.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
