Oil spikes over 1% on the U.S. for the fourth time striking Houthi targets in Yemen. OVX (oil volatility) is also spiking indicating that bullish calls are still place for the oil price to return to $75.

Markets are slightly pricing in a full blown war in the Middle East, with the U.S. and U.K. attempting precision strikes on Houthi miliaria positions on the coast of Yemen ala Red Sea, which have been launching missile and drone attacks on Red Sea shipping.  The strikes, whether or not are token in nature, will have an affect on shipping insurance rates and shipping costs = inflation, so it would be prudent to factor in a possible larger military incursion into Yemen by the West.  As the Houthu have said they will continue attacking all ships entering the Red Sea with missiles, as long as Israel continues to attack Gaza.  And since there is no ceasefire.  Will the U.S. send in an armed ground force?

The oil price spiked over 1% on the 17th and 18th October U.S. airstrikes on Houthi held territory.  Bouncing off its support of $70 and allying over $72, now bid at $73 on the recent missile attacks of Houthi military installations.

Orange line is the OVX, which measure oil options within a 30 day moving average.  Showing that 'calls' were bought in lieu of the America attacking Yemen, spiking to 40 points, then falling to 37.  Yet, holding above the $72 oil price support.  Which means that oil has a bullish inclination, despite the China slowdown.