17 June 2025,06:14
Daily Market Analysis
17 June 2025, 06:14
Key Takeaways:
*Israel-Iran escalation reignites supply disruption fears, but market discounts full-scale conflict risk
*Mixed Chinese data and rising U.S. fuel stockpiles highlight fragile demand outlook
*OPEC+ spare capacity and Saudi flexibility cap upside, anchoring prices despite geopolitical risks
Crude oil prices surged sharply as a fresh wave of Israeli airstrikes on Iran’s critical oil and gas assets raised the specter of sustained supply disruptions in an already fragile market. Over the weekend, coordinated attacks reportedly hit a major fuel depot and ignited fires at a Tehran-based refinery, marking a dangerous escalation in hostilities that risks drawing the broader region into conflict.
These latest strikes follow earlier Israeli operations on military and nuclear targets, including the assassination of senior Iranian officials, and appear increasingly focused on undermining Iran’s energy sector—a key source of revenue for Tehran and a pillar of global oil supply. Iran holds the world’s third-largest proven oil reserves and is a pivotal OPEC member, producing over 3 million barrels per day.
The market reaction was immediate. Crude oil briefly surged as traders priced in heightened geopolitical risk and potential output losses. Any material disruption to Iran’s exports—or broader transport flows through the Strait of Hormuz, which handles roughly 20% of global seaborne oil—could fuel a sharp repricing across the energy complex.
While diplomatic channels are reportedly active behind the scenes, the potential for Iranian retaliation or proxy responses remains high. Investors are now recalibrating risk models to account for prolonged volatility and asymmetric threats to regional energy infrastructure. With the geopolitical premium reasserting itself, oil remains poised for further gains should tensions escalate or supply take a sustained hit.
Crude Oil, H4:
WTI crude oil is retreating from recent highs after failing to hold above the $73.15 resistance level, with price action showing signs of exhaustion following its sharp rally earlier this month. Price has since pulled back below the $71.00 handle and is currently testing the $70.00 psychological threshold, with immediate downside risks toward the $68.00 support level.
Momentum indicators are turning cautious. The Relative Strength Index (RSI) has slipped from overbought territory and is now tracking around 56, reflecting waning bullish momentum and a possible shift to neutral territory. The MACD, meanwhile, has completed a bearish crossover, with the histogram dipping into negative territory—an early signal of weakening upward momentum and possible short-term correction.
If price fails to stabilize above $73.15, WTI risks extending losses toward $68.00, with a deeper pullback potentially targeting the former breakout zone near $63.65. On the upside, only a clear break and close above $73.15 would revive bullish conviction and open the path toward $78.00. Until then, crude appears vulnerable to mean reversion as momentum cools.
Resistance Levels: 73.15, 78.00
Support Levels: 68.00, 63.65
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