I am writing my weekly update one day early as I will be out of town tomorrow. Considering the current volatility of the crude oil markets at the moment, by end of day tomorrow, the following update could already be out of date! I hope everyone has a great rest of their week!
Energy markets experienced historic volatility again this week as the war with Iran continues to dominate global oil trade. Prices briefly surged above $115 per barrel early in the week before swinging wildly in both directions as traders reacted to military developments, production shutdowns, and the continued closure of the Strait of Hormuz. Even after massive swings during the week, crude oil now looks set to close near $100 per barrel, marking another strong weekly gain.
Crude oil markets experienced one of the most volatile weeks in years, with prices set to book their largest weekly increase since 2020. The surge was triggered by a dramatic escalation in the Middle East after the United States and Israel launched strikes inside Iran over the weekend that killed the head of Iran’s ruling leadership.
The following is a summary of the past two weeks. Crude oil prices are closing out a volatile stretch of trading over the past two weeks with WTI hovering in the upper mid-$60s after briefly touching the highest levels in more than nine months.
Crude oil prices paused late in the week after a sharp two-week rally, with WTI pulling back towards $65/barrel. The pause came after President Trump announced the appointment of a new Fed Chair, Governor Kevin Warsh, which pushed the dollar higher and capped crude’s momentum. Trump also signaled a shift in tone toward Iran, saying he plans to pursue talks with Iranian leaders rather than immediate military action. That combination removed some of the geopolitical premium that had built into the market.
Wow, it’s a cold one out there this week and next week! I hope everyone stays safe and warm. It’s been awhile since we’ve had this amount of cold weather for a couple of weeks. Thankfully, February is looking to be more normal temperatures. This past week was a head spin of data. As I began to write, for the first time in a while I didn’t know where to start. LOL! On to the update!
Crude oil prices are set to finish the week lower, falling back below $60 per barrel after a short-lived rally earlier in the week. The move lower came after President Trump announced that violence in Iran is easing and that U.S. intervention is not necessary at this time. That statement removed much of the geopolitical risk premium that had supported crude for several days and marked the first daily decline in six sessions. Even with occasional rebounds, the broader trend remains fluid as markets continue to focus on oversupply heading into 2026.
Crude oil prices ripped higher on Thursday and Friday as unrest in Iran intensified, raising concerns that protests could eventually disrupt production. That said, the rally looks more geopolitical than fundamental. The sharp selloff below $55 per barrel earlier in the week triggered technical and headline-driven buying, but broader economic data continues to point toward demand weakness.
