Crude oil gave
back some of yesterday’s gains overnight, although the geopolitical situation
remained unchanged.
The Houthis continue
to attack Saudi Arabia, keeping concerns about further disruptions to energy
infrastructure and shipping routes high. Meanwhile, US-Iran negotiations remain
at a stalemate, with no breakthrough in sight to reopen the Strait of Hormuz.
On the
Russia-Ukraine front, the proposed energy ceasefire remains uncertain, with Kiev
reporting further Russian strikes on energy infrastructure. Meanwhile,
potential increases in Russian fuel exports could help ease refined-product
supply constraints, although it might just be a short-term relief.
Oil prices remain
the key transmission channel between geopolitical developments and other
markets.
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 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 into new weekly highs yesterday before pulling back. If the price
moves back into the lower bound of the channel, 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 have
a minor downward trendline defining the current pullback. The sellers will
likely continue to lean on it, with a defined risk above it, to keep pushing
into new lows. The buyers, on the other hand, will want to see the price
breaking higher to pile in for a rally into the 96.77 level next. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US CPI
report. On Thursday, 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.