Oil markets are extending gains for a third consecutive session as escalating US-Iran tensions drive crude benchmarks sharply higher, according to BNY strategist Bob Savage. Both WTI and Brent are testing the critical USD 90 per barrel threshold following missile and drone attacks in the Gulf region, a major supply corridor handling roughly one-fifth of global petroleum flows.
The geopolitical risk premium is now colliding with fundamental concerns about global growth, creating a challenging trade-off for central banks and policymakers. Higher energy costs threaten to reignite inflationary pressures just as economic momentum shows signs of weakening across major economies. Traders are closely monitoring supply disruption risks while assessing whether demand can support elevated price levels amid softening growth outlooks.
The situation remains fluid as markets weigh the sustainability of conflict-driven rallies against underlying demand fundamentals. Energy-dependent sectors and transportation costs face immediate pressure from the price surge.
FXnCO Insight
Monitor crude positions closely as geopolitical premium may prove temporary if growth concerns ultimately override supply fears, creating potential reversal opportunities above USD 90.
Source: FXStreet