Oil prices remain
supported by escalating tensions in the Middle East. The Houthis have
intensified attacks against Saudi Arabia, including a reported strike on an
administrative building at Saudi Aramco’s Dhahran compound.
Although the
incident did not confirm any direct loss of oil production, the risk of attacks
spreading to energy infrastructure, pipelines or export terminals is increasing
the risk premium. Any confirmed disruption to Saudi oil flows would add further
upward pressure to oil prices.
Looking ahead, the
focus will remain on the Middle East developments. A breakthrough in US-Iran
negotiations will trigger a strong selloff in crude oil on improved supply
expectations. A prolonged stalemate or re-escalation, on the other hand, will
likely take oil prices back above the $100 level.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil (CFD contract) has extended
the gains further into new weekly highs. If the price pulls back into the lower
bound of the channel again, we can expect the buyers to step in, with a defined
risk below the channel, to position for a rally into the 110.00 resistance. The
sellers, on the other hand, will look for a break lower to pile in for a drop
into the 68.00 support next, with the 80.00 level as the first target.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor upward trendline defining the current bullish momentum. The buyers will
likely continue to lean on the trendline, with a defined risk below it, to keep
pushing into the 96.77 level. The sellers, on the other hand, will look for a
break lower to extend the pullback into the lower bound of the channel,
targeting a break below it.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see that the break of the minor downward trendline that was defining the pullback
into the 4-hour timeframe led to a rally as more buyers piled in on the break
to target the 96.77 level. If the price gets there, we can expect the sellers
to step in, with a defined risk above the level, to position for a drop into
the lower bound of the channel. The buyers, on the other hand, will want to see
the price breaking higher to increase the bullish bets into the 110.00 resistance
next. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the US CPI
report. Tomorrow, we get the US PPI, the US Retail Sales and the latest US
Jobless Claims figures. The focus, though, will remain on US-Iran negotiations.
This article was written by Giuseppe Dellamotta at investinglive.com.
