The oil price breakout is confirming and that's a big problem

$100 is the big psychological level in oil and we've broken it today in brent, though not yet in WTI. Technically though, the $93.50 level oil was flirting with yesterday is the more-important level. For a moment, it looked like crude could reject it but today it has cruised through.WTI is trading up $2.85 at a session high of $95.81 per barrel. That clears the July high and marks a distinct series of higher lows since MOU peace deal low in early July.Fundamentally, Trump has a real problem here and it's now slowing down. The rumors of peace deals are being routinely ignored by the market now as it's abundantly clear that both sides are hunkering down.For the Iranian side, this is an existential struggle. There is talk of regime collapse and you never know if that will unfold but if not, they have proven an ability to curb Hormuz flows. However even in a case where only Iran's oil is blocked by the US, that's still a material drain on global supplies that's starting to bite.On the US side, it's a matter of guessing what Trump will do, which is near-impossible. Some of the recent messaging on higher oil prices is telling Americans that's the price they need to pay for a non-nuclear Iran, or blaming Russia-Ukaine but that's a tough platform for the midterms. The gasoline on the fire is the price of gasoline, which is ratcheting higher. Diesel already hit records and gasoline is starting to take off, including a record for Labor Day this weekend. RBOB wholesale gasoline (Oct):There has to be a breaking point somewhere and it's almost beneficial if we can get a spike now, in order to create the pressure for peace. The risk is that Trump grows too proud -- particularly after the midterms -- and tried to a blind-eye to an oil spike.The problem is that energy inflation can spill over into broader inflation expectations. Already, we're seeing rising sovereign yields everywhere and US 10-years are within striking distance of 5%. In Japan, 30-year yields are just 2 bps from 4%. At some point that also boomerangs back into stock markets.Unfortunately, I think we're still a long ways away from the breaking point. This article was written by Adam Button at investinglive.com.