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WTI Climbs 2.5%+ After Strait of Hormuz Attack Reports
Tuesday's 2.6% surge pushed WTI back above $73, with traders watching for further escalation in the Strait of Hormuz shipping lane.
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Crude oil futures rose more than 2.5% on Tuesday, extending a recovery from the prior week's lows. The move followed reports that commercial vessels in the Strait of Hormuz came under attack, reviving fears about supply from the region's busiest shipping lane.
The Strait of Hormuz carries about a fifth of the world's oil. A similar incident in late May triggered a 2.85% jump in WTI, as Oil Jumps 2.85% After UKMTO Raises Hormuz Threat to Severe reported. That parallel was not lost on traders, who said the latest attack suggests the threat is not isolated.
The price action broke a pattern that had held for weeks. WTI had been stuck between $70 and $73 since early June, with options activity capping gains near the upper end, as WTI and Brent Settle Into Summer Range, Options Cap Action noted. Tuesday's move pushed the contract above $73, a level that had been resistance since mid-June.
Trading volumes picked up as the news spread, multiple traders said. The jump was broad-based, with Brent crude also rising more than 2% and gasoline futures following suit. The attack drew attention back to the security of the waterway, which had been a secondary concern for markets earlier this year.