WTI oil prices slipped as European trading opened on Friday, retreating from the multi-week highs reached in the previous session. The pullback came as traders responded to an announcement from the US administration indicating a two-week timeline for a decision on potential American involvement in the ongoing conflict between Israel and Iran. The delay in action by the White House echoes previous instances under Donald Trump, where market pressures influenced policy decisions — a pattern some have dubbed “TACO”. Direct US military involvement in the conflict would carry unpredictable geopolitical consequences and could severely disrupt oil supply from the Persian Gulf. Such a scenario would likely trigger a sharp flight from risk assets, lead to equity sell-offs, and potentially drive oil prices above the $100 mark. Despite a more than 20% rise in WTI oil prices since the beginning of June, markets have yet to fully price in the risk of US intervention or the outbreak of a broader regional war. Against this backdrop, heightened volatility is expected in the oil market as traders closely monitor developments — particularly any signals from Washington regarding the administration’s stance on possible military action.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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