Oil Markets Eye $105 as Iran Risk Premium Holds

Oil prices are moving higher, supported by a persistent geopolitical risk premium from the Iran situation and ongoing supply tightness. The USO ETF rose 1.25% to $137.05. In prediction markets, the 'Crude Oil hits $105+' by end of June contract (ticker: 0x86c4455035d81c5121) edged up 1¢ to 40¢, indicating a growing probability of further upside. Conversely, the 'oil below $85' contract (ticker: 0xa4c71c6f43ceb1dec4) dropped 7¢ to 55¢, and the 'below $80' contract (ticker: 0xbaf252e7ac957d6636) fell 5¢ to 32¢ — both suggesting traders believe a dip below those levels is becoming less likely in the near term. The most liquid oil-related market is the weekly WTI settlement contract (ticker: KXWTIW-26JUN0514-T93) which prices a 57% chance of WTI closing above $93.99 on June 5. The broader 'oil above $130' contract (ticker: 0xa5d0dfc81e6a87faa7) is at a low 8¢, suggesting a tail risk but not a base case. The key driver remains the Strait of Hormuz: the normalization contract by end of June (ticker: 0x348cd9adf4f6855f58) is only at 21¢, and the July 31 contract (ticker: 0xb8e6d129a06d0ccb21) at 39¢. For traders, the risk/reward is asymmetrical — an unexpected de-escalation could cause oil to collapse, while any further escalation could push prices sharply higher. The suggested action is to monitor the Kalshi weekly WTI contracts for short-term tactical positioning.