FUNDAMENTAL
OVERVIEW
Oil has been slowly edging lower since yesterday after
Saudi
Arabia said it was seeking to restore about half the capacity of its
cross-country oil pipeline within days, easing some of the recent supply
fears.
Saudi Aramco said it was working to bypass a damaged
section of the route, allowing it to resume part of the pipeline’s capacity.
The company is aiming to restore the pipeline to full capacity in about six
weeks.
Meanwhile, Trump told reporters yesterday that the US was
“hopefully toward the end” of the war with Iran, adding that he has spoken with
Tehran “directly”. This is different from his previous hawkish comments saying
that the war would not end until after the midterms. Maybe, $100 oil, rate
hikes and elevated bond yields are putting more pressure on Trump to get out of
this mess.
Lastly, Axios
reported that Trump is expected to hold a meeting with Gulf leaders on the
sidelines of the UN General Assembly in New York next Tuesday to discuss
the next steps in the war with Iran. Axios highlighted that last year, Trump
met during the UN General Assembly with leaders from eight Arab and Muslim
countries and presented them with his draft Gaza peace plan. He presented it publicly a week later. A deal to end
the war was reached shortly afterward.
Taken together, these are signals of potential
de-escalation which might keep oil prices in check for now around the recent highs.
Stronger signs of de-escalation will likely trigger selloffs in oil prices, so
traders stay laser-focused on the live
feed for incoming breaking news and Trump’s Truth Social posts.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil(CFD contract) rejected the key
resistance zone around the 105.00 level and pulled back. The sellers stepped in
around the resistance with a defined risk above it to position for a drop into
the lower bound of the channel around the 85.00 level. The buyers, on the other
hand, will want to see the price breaking above the resistance to increase the
bullish bets into the 111.00 handle next.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we
have an upward trendline defining the bullish momentum. The buyers will likely
lean on the trendline with a defined risk below it to keep pushing into new
highs. The sellers, on the other hand, will look for a break lower to increase
the bearish bets into the lower bound of the channel.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor downward trendline defining the recent pullback into the 4-hour
trendline. The sellers will likely continue to lean on the trendline to keep
pushing into new lows, while the buyers will look for a break higher to pile in
for new highs with more conviction. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe get the US Jobless Claims figures,
but traders will continue to keep a close eye on the developments in the Middle
East.
This article was written by Giuseppe Dellamotta at investinglive.com.