The start of the year has seen a rise in commodity prices, with WTI crude up by around $4 per barrel. Concerns over events in the Middle East, including anti-government protests in Iran and potential US military intervention, are keeping oil prices above $66 per barrel. The situation in Venezuela, following the removal of President Maduro, could lead to increased oil supply and lower prices.

Protests in Iran are escalating, with the US potentially offering military support to the opposition. This could heighten geopolitical tensions and increase investor caution, pushing money towards safe-haven assets like gold and US Treasuries, as well as oil. China’s response will be key, given its close ties to Iran and Venezuela.

Iran’s role in the global oil market is significant, as the fourth-largest oil producer in OPEC+ with leverage over the Strait of Hormuz. While a blockade seems unlikely, it could impact China, a key partner. Oil prices may face short-term pressure if worst-case scenarios are avoided, but a sharp spike is not expected.

WTI crude oil prices are consolidating between $55 and $61 per barrel, with buyers likely testing the upper end amid rising geopolitical tensions. If prices break above, the next target is around $66 per barrel, with key support at $55 per barrel.

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