Oil Price Forecast: WTI Eyes $100 Breakout as Hormuz Tensions Fuel Supply Risks
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Key Points:
- WTI eyes a $100 breakout as rising Strait of Hormuz tensions increase oil supply risks.
- Low U.S. crude and fuel inventories leave little room to absorb a major supply disruption.
- A break above $106 could strengthen the long-term oil rally and open the way towards $150.
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Oil prices are rising as the escalation in the conflict in the Strait of Hormuz raises the risk of a broader supply disruption. Low U.S. crude and fuel inventories also indicate that there is less room for the market to absorb a big supply shock. The higher energy prices are also increasing the inflation and interest rate outlook. In my view, WTI oil could break the $80 to consolidate in the premium zone. A break above $106 would open the door for a surge to $150.