On Tuesday, the 16th of July 2019, US Consultancy Rapidan said after analyzing multiple scenarios on Gulf tension that crude oil futures price would more likely to trail an ‘M’ shaped chart, spike, ease and climb again in a near-term outlook.
Aside from that, the US consultancy firm had also added that as an initial reaction to an Iranian blockade of the strategically critical Strait of Hormuz would surge crude oil price by $15-$20 per barrel, nonetheless, the prices would likely to experience an immediate easing following engaging of US forces.
Apart from that, Rapidan Energy Group had been quoted saying on Tuesday (July 16th) that the crude oil price reaction to any aggressive action of Tehran would lead to an “M” shaped graph as beforementioned, adding that a premature sell-off following engaging of US forces would lead to a second spike, which may cruise crude oil prices much higher than the initial upsurge.
Besides, Rapidan added that the disruption of crude oil flow through the Strait of Hormuz, accountable for channeling more than one-third of crude oil exported through sea corridors, would likely to last longer than market expectation, as Iran-backed Houthi alongside Iranian revolutionary Guard’s attack on supertankers passing through the Strait of Hormuz might have been appeared to be sporadic, but expected to be continued, citing a general of Iranian revolutionary guard.
Nonetheless, while this report was being prepared, during early US trading hours, US West Texas Intermediate crude had been up by 0.36 percent to $59.83 per barrel, while the Brent crude futures had been up by 0.50 percent to $66.86 a barrel.