Crude oil prices extended their breakout rally this week as escalating hostilities between Iran and Kuwait added fresh supply-risk premium to energy markets. Brent crude, the global benchmark, climbed to $95.3, while West Texas Intermediate (WTI) reached $91 after Kuwait reported confronting hostile missile and drone attacks originating from Iran.
The attacks mark another phase of retaliation following US strikes during the weekend, which Iran said killed at least 50 people, including civilians attending a wedding. The escalation has kept traffic through the Strait of Hormuz under pressure, with part of the shipping fleet reportedly switching off transponders, complicating supply visibility.
Trump said in a statement that Washington was in control of the Strait and suggested renaming it to Trump Strait, while also claiming the current fighting would not last long. However, the timeline on the conflict has repeatedly shifted.
From a technical perspective, WTI broke above a key resistance zone between $87.00, the downward-sloping trendline of the daily triangle from May, and the 50% Fibonacci retracement of the April downward impulse. Analysts now expect WTI to target $92.00, the low of wave (1) from late July. Brent's daily chart shows an island reversal pattern, a move above the 50-day moving average, and rising PPO and RSI readings, with the next major targets at $100 and $102.
The bullish tone was reinforced by US inventory data. The Energy Information Administration reported that crude inventories dropped by more than 4.5 million barrels last week, far exceeding the expected 400,000-barrel draw. Meanwhile, Strategic Petroleum Reserve inventories have fallen to their lowest level in decades.
