Rory Johnston: March oil rally driven by Gulf war risk fears

Rory Johnston: March oil rally driven by Gulf war risk fears
Precautionary buying spurred March oil rally

Rory Johnston reflects on how the oil market could have responded to renewed open conflict in the Gulf.

He observes that much of the March oil price rally was likely driven by precautionary buying, as market participants reacted to the perceived heavy tail risk of potential escalation.

Johnston has previously commented on large intraday swings in oil prices. He proposed a lighthearted rule for traders to step back when crude moves more than $15 per barrel within a single day. In another note, he documented a session where Brent crude reversed from a $5 loss to a $2 gain. These episodes highlight his ongoing focus on rapid price changes in the market.

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