Oil price spikes near $120 as war escalation darkens supply outlook and warns of deeper crisis

In a widely expected scenario, WTI oil opened with big gap higher and spiked to nearly $120 per barrel (the highest since mid-2022) at the start of the week.

Growing fears of prolonged larger supply disruptions, due to closure of Hormuz strait, damaged oil installations and high risk and cost of transportation, continue to inflate oil prices and threaten of an energy crisis not seen since 1970s.

Quick break of psychological $100 barrier and rise near 2022 peak ($130) warns that oil prices may advance further and remain elevated for longer period that would cause a domino-effect and hit all sectors of world economies.

Subsequent pullback from new peak ($119.44) cracked $100 level which reverted to support, though dips would rather mark positioning for fresh push higher as escalation of the war and deepening crisis, can work only as very supportive factor for oil prices.

Supports at $100/$97.40 (psychological / Fibo 38.2% of $61.75/$119.44 upleg) should contain pullback and keep larger bulls in play for acceleration towards $130 (June 2022 high), violation of which would expose targets at $135.13 (Fibo 200% projection of the rally from $54.87) and $140 (round-figure).

Res: 105.83; 107.35; 110.00; 116.75
Sup: 102.65; 101.00; 100.00; 97.40