Oil prices move higher as Iran threatens response to latest U.S. strikes
Brent crude futures, the international benchmark, gained 1.5% to $92.10 a barrel. U.S. West Texas Intermediate futures advanced 0.9% to $85.23 per barrel.
Oil prices are edging higher as tensions in the Middle East escalate. Iran's threat of a response to the latest U.S. strikes has raised concerns about potential disruptions to global oil supplies. As a result, traders are pricing in a higher risk premium, driving prices up.
The move higher in oil prices is notable, but still, the gains are relatively modest. This could be due to the market's assessment that a full-blown conflict is not imminent. Additionally, the global economy is still grappling with high inflation and interest rate hikes, which could cap demand for oil. Nevertheless, traders are watching the situation closely, as any escalation could have significant implications for oil production and prices.
Looking ahead, traders will be monitoring developments in the Middle East for any signs of further escalation. Key levels to watch are the $95 and $80 per barrel marks for Brent and WTI, respectively. A break above these levels could signal a more sustained move higher in oil prices. Option traders may consider positioning themselves for potential volatility in oil prices by buying straddles or looking at out-of-the-money calls and puts.
Originally reported by cnbc.com. OptionNews adds analysis for finance & markets readers.