19.08.202609:21 Forex Analysis & Reviews: Oil Prices Rise for the Fourth Consecutive Day

Oil prices are increasing for the fourth day in a row, and there are no signs of progress in resolving the Iran-U.S. conflict after nearly six months of war. Brent is approaching $92 per barrel, while WTI is nearing $86.

The diplomatic stalemate has become the main driver of this increase. President Donald Trump stated on Tuesday that no negotiations with Tehran are taking place, as the status of the Strait of Hormuz remains disputed. According to him, in the absence of negotiations, the U.S. intends to increase economic pressure on Iran to force Tehran to capitulate while maintaining the blockade of Iranian ports. Treasury Secretary Scott Bessent noted that a package of new stringent measures might be announced this week.

The actual shipping situation confirms the seriousness of the circumstances. Visible movement along the waterway connecting Gulf producers with global markets remains low. On Tuesday, the UK reported that a vessel leaving the strait was hit by a projectile, resulting in one casualty. On Wednesday, tracking data recorded that two China-linked supertankers turned back, choosing not to risk passing through the strait.

The most dramatic situation lies not within oil itself but in oil products. Global diesel fuel markets are experiencing a particularly tense period: supplies from the Middle East are disrupted, and Moscow has halted exports. In the U.S., the margin for producing diesel from crude oil exceeded $100 per barrel, reaching a record high. In Europe, gasoil prices have risen alongside oil, with futures up 0.7% to $1,308 per ton. This is why prices for oil products, especially diesel, have risen much more sharply than for oil itself, intensifying pressure on drivers, truckers, farmers, and the industrial sector. In other words, the market is gradually shifting from trading news to trading real shortages.

A significant political signal was the United Arab Emirates' decision to suspend all trade and financial operations with Tehran in light of what they termed regional escalation. The UAE, located across the Persian Gulf from Iran, often becomes a target for attacks, particularly on shipping, and this move reflects both increased tensions and an attempt to distance itself from the Iranian economy amid U.S. sanctions.

Data on inventories support arguments for further price growth. The American Petroleum Institute reported yesterday a modest decline in national crude oil stocks, including at the Cushing Hub in Cushing, Oklahoma. Distillate stocks, which include diesel fuel, are also decreasing. Official data is expected to be published today.

Regarding the current technical picture for oil, buyers need to break through the nearest resistance at $86.60. This will allow targeting $89.60, above which it will be quite difficult to break through. The farthest target will be around $92.56. In the event of a decline, bears will attempt to take control at $84.40. If successful, breaking the range will deal a serious blow to bullish positions, pushing oil down to a low of $81.50 and potentially reaching $78.70.