iMetal

Last week’s crude rally, which had started on the announcement of an armada heading towards Iran, gained further momentum this week on President Trump’s re-emphasis of the US demands and the approaching naval fleet. An unexpected inventory draw, along with Winter Storm Fern fueling heating oil demand and causing freeze-offs, served to add fundamental support for the uptrend.

Prices for the US grade have broken through the technically important Upper-Bollinger Band limit, a Sell signal. Bearish news came in the form of the restart of Kazakhstan’s production and the announcement of the lifting of most sanctions on Venezuelan’s production and exports.

WTI’s weekly high of $66.50/bbl occurred Thursday while the low of $60.15 was on Tuesday. Brent followed a similar pattern with its high of $71.90/bbl on Thursday and its weekly low of $65.00 on Tuesday. Both grades settled higher week-on-week. The WTI/Brent spread has widened to ($5.70). Prices have not been this high since late September 2025.

Pres. Trump has stated that he has given Iran a deadline to make a deal over its nuclear program, ballistic missiles, and other issues, but would not reveal that date. He emphasized that the naval armada was larger than the one sent to Venezuela. While a direct attack on Iran does not seem likely in the near-term, a naval skirmish in the Strait of Hormuz would interrupt a vast supply of crude exports in the region. According to Pakistani sources, Iran plans on conducting a live fire drill next week in the Strait and has warned ships at sea there. Traders have valued this rising risk premium at around $3-4.00/bbl.