Crude oil is taking a another step to the upside with a move to a new intraday high of $107.63. The current price is trading at $107.30. The move higher has now taken the price above a swing area between $105.53 and $106.86. Staying above that area would keep the buyers in firm control. Moving back below would disappoint those buying on the break.
Earlier reports that the blockade of Iranian ships would continue perhaps for months by the US helped to push the price higher.
Meanwhile, the Wall Street Journal today is reporting that Iran’s economy is under severe strain from war and blockades, with unemployment surging, inflation near 67%, and the currency hitting record lows. Basic goods are increasingly unaffordable, and businesses are shutting down across multiple sectors.
The conflict has turned into an economic standoff with the U.S. Iran’s closure of the Strait of Hormuz and the U.S. naval blockade have choked off key oil revenues, with both sides betting the other will crack first.
Government finances are stretched thin as revenues fall and war damage mounts. Efforts to offset the impact—subsidies, wage hikes, and alternative trade routes—have provided only limited relief.
Economic hardship is at its worst in decades, raising the risk of renewed unrest and political instability.
Bottom line:
Iran’s economy is under intense pressure, and the outcome may depend on which side reaches its economic breaking point first.. Meanwhile, the price of oil moves sharply higher and is breaking above a key swing area between $105.53 and $106.86
This article was written by Greg Michalowski at investinglive.com.
