Brent Crude Breaks Above $100: This Time It’s Not Strong Demand—Oil Is Getting Stuck on the Way
Late last night, Brent crude surged to $101.21, up 3.36%, and for the first time since the end of July it reclaimed the $100 psychological level. But the nature of this break above $100 is different—this isn’t because everyone suddenly needs more oil. It’s because the oil can’t get through.
Within a week, the U.S. military took out 10 Iranian oil tankers, and Iran immediately retaliated near the Strait of Hormuz by attacking 10 vessels—marking the largest sea clash in six months. Meanwhile, the Houthis are also not idle: dozens of missiles and drones bombarded Saudi Aramco, with multiple energy facilities catching fire. Since only a few ships can pass through Hormuz each day and inventories are still falling, the price naturally trends higher. Some institutions estimate that if the strait truly becomes tightly blocked, oil prices could head toward $120.
But right after breaking above $100, the market quickly came to its senses—the higher the oil price, the harder inflation becomes to control. One estimate suggests that if oil prices hold around $100, U.S. inflation could be pushed back from 2.4% to above 4%. CME data shows that the probability of a September rate hike by the Fed jumped to 60% overnight, which is bad news for both stocks and the crypto market.
So what happens next? Expect high-level consolidation, with strong disagreement between bulls and bears. In the short term, watch 97.8 closely as the key watershed: if it holds, the bulls may still have a chance to push again; if it breaks, it could pull back toward 94. Don’t chase; don’t bottom-fish—wait for the direction to become clear before following. In this market, the news out of the strait matters more than the K-line. Be patient and wait.
This setup can’t be rushed. Hang in there, everyone!
Late last night, Brent crude surged to $101.21, up 3.36%, and for the first time since the end of July it reclaimed the $100 psychological level. But the nature of this break above $100 is different—this isn’t because everyone suddenly needs more oil. It’s because the oil can’t get through.
Within a week, the U.S. military took out 10 Iranian oil tankers, and Iran immediately retaliated near the Strait of Hormuz by attacking 10 vessels—marking the largest sea clash in six months. Meanwhile, the Houthis are also not idle: dozens of missiles and drones bombarded Saudi Aramco, with multiple energy facilities catching fire. Since only a few ships can pass through Hormuz each day and inventories are still falling, the price naturally trends higher. Some institutions estimate that if the strait truly becomes tightly blocked, oil prices could head toward $120.
But right after breaking above $100, the market quickly came to its senses—the higher the oil price, the harder inflation becomes to control. One estimate suggests that if oil prices hold around $100, U.S. inflation could be pushed back from 2.4% to above 4%. CME data shows that the probability of a September rate hike by the Fed jumped to 60% overnight, which is bad news for both stocks and the crypto market.
So what happens next? Expect high-level consolidation, with strong disagreement between bulls and bears. In the short term, watch 97.8 closely as the key watershed: if it holds, the bulls may still have a chance to push again; if it breaks, it could pull back toward 94. Don’t chase; don’t bottom-fish—wait for the direction to become clear before following. In this market, the news out of the strait matters more than the K-line. Be patient and wait.
This setup can’t be rushed. Hang in there, everyone!