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Market Insights > Daily Market Analysis New

Oil Rally Deepens as Supply Risks Intensify

Published: 10 September 2026,09:04

Daily Market Analysis New

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Key Takeaways:

*Brent holds above $100 as renewed US-Iran tensions and tanker attacks keep a strong geopolitical premium in crude.

*Hormuz disruption remains the key supply risk, with flows still far below normal and additional threats emerging around the Red Sea and Bab el-Mandeb.

*Global inventories are tightening, with the EIA estimating a roughly 400-million-barrel decline this year and Middle Eastern production losses expected to persist into 2027.

Market Summary:

Oil prices remain firmly supported as renewed US-Iran hostilities deepen concerns over Middle Eastern supply disruptions. Brent crude has moved back above the $100-per-barrel threshold, settling around $101.21, while WTI reached roughly $96.05, with both benchmarks at their highest closing levels since May. The latest rally follows the US destruction of five Iranian oil tankers and Iran’s subsequent attacks on shipping around the Strait of Hormuz. Iran has also warned of further retaliation, while Iran-backed Houthis have expanded attacks toward Saudi energy infrastructure. The combination of tanker attacks, threats to shipping and pressure on alternative export routes has kept a significant geopolitical risk premium embedded in crude prices.

The Strait of Hormuz remains the central supply risk for the oil market. Before the conflict, the waterway carried roughly one-fifth of global oil and gas supplies, but flows have remained far below normal levels as the conflict disrupts tanker traffic. The latest escalation is particularly important because the disruption is no longer confined to Hormuz: attacks on Saudi energy infrastructure and shipping through the Red Sea and Bab el-Mandeb are creating additional pressure on alternative routes. This raises the possibility that even if some Hormuz traffic resumes, the global market may continue facing logistical bottlenecks elsewhere. Traders are therefore watching actual export volumes and tanker movements closely, as relatively small changes in physical flows can now trigger large swings in prices.

The supply picture is becoming increasingly tight. The US Energy Information Administration raised its 2026 Brent forecast to around $91 per barrel, citing falling global inventories and prolonged Middle Eastern production losses. Global oil inventories have reportedly fallen by roughly 400 million barrels this year, while Middle Eastern production shut-ins reached about 6.7 million barrels per day in August, up from around 5 million bpd in July. The EIA expects regional output and exports to remain below pre-conflict levels until the second quarter of 2027, highlighting that the supply shock could extend well beyond the immediate geopolitical headlines. At the same time, China remains an important demand-side variable: weaker Chinese imports had previously helped limit the oil rally, but a recovery in Chinese purchases could add another layer of upward pressure to crude prices.

Beyond the physical supply shock, oil is increasingly becoming an inflation and monetary-policy story. Brent above $100 and record US diesel prices are raising transportation, manufacturing and consumer costs, increasing concerns that higher energy prices could keep inflation elevated. US 10-year Treasury yields have climbed to around 4.84–4.85%, their highest level since 2023, as markets reassess the possibility that central banks may need to keep rates higher for longer. This creates a challenging environment for equities and risk assets, with the S&P 500, Dow Jones and Nasdaq all falling on Wednesday as oil surged. The next major catalyst is US inflation data, which could determine whether the oil shock translates into a stronger repricing of Federal Reserve policy. If crude remains above $100 for an extended period, the market will increasingly have to balance supply-driven inflation against weaker economic growth, raising the risk of a more stagflationary backdrop.

Technical Analysis

Chart the Market (22/12/2025) – PU Prime | More Than Trading

CL-Oil, H4

Crude oil remains strongly bullish with price extending its sequence of higher highs and higher lows after breaking above the 88.85 and 94.05 resistance levels. Price is currently trading around 96.35, approaching the key 97.75 resistance, which is the next major hurdle. The latest advance has been relatively consistent, with previous resistance around 94.05 now acting as an important near-term support zone.

Momentum remains supportive of the upside. RSI is at 67 staying below the 70 overbought threshold while showing that buying momentum remains strong. MACD is also bullish, with the MACD line above the signal line, while the histogram remains positive. This suggests that upside momentum is still intact, although the relatively elevated RSI means the market could become vulnerable to a short-term pullback if buyers struggle to clear 97.75.

Resistance level: 97.75, 101.00

Support level: 94.05, 88.85

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