Oil Resurgence: Conflicts Boost Prices
In today's oil market, we have witnessed a strong bullish rally after a -3.37% drop last week between Tuesday and Friday. This momentum is due in part to increased conflicts in the Middle East and on the Ukraine front with Russia. The disruption created in Russian refineries with Ukrainian attacks by fighter drones throughout the month have created geopolitical pressure in the region that may facilitate upward price stress from buyers looking to secure demand, as 12% of Russian production capacity has been affected according to ANZ Research. In addition, the decline in the number of oil rigs in the United States has put upward pressure on prices. Disruption at Russian refineries due to drone strikes by Ukraine has created geopolitical pressure that could increase demand and, as a result, prices. Recent conversations between Antony Blinken, US Secretary of State, and Israeli Prime Minister Benjamin Netanyahu have highlighted the risk of global isolation if attacks in the Gaza Strip continue. In the Middle East, US forces on Saturday responded by shooting down six Huties strikes south of the Red Sea aimed at destroying a Chinese oil tanker, adding to volatility in both regions.
We are at a time of high volatility and systemic risks in these regions, which could further boost crude oil prices in the short term in what could be a change of uptrend for the long term. The price has recovered part of its price during the Asian session due to the aforementioned conflicts and also at the beginning of today's European session, the continuation of this upward pressure is clearly being perceived.
At the opening of the Asian session, prices started at $80.44 and are currently at $81.12, with a high for the day of $81.32, thus fracturing the bearish pennant figure that has been forming during the previous week's sessions. Technical analysis shows a possible bullish continuation towards $83.03 if the price manages to break above the $81.50 mark, which is the middle zone of the channel. However, it is important to note that trading volumes are not particularly strong at the moment and the trading bell marks us $80.96 as the most preponderant value at the checkpoint (POC). The RSI is slightly overbought at 61.21%, while the 200-day moving average is at 55.52%. These signals could indicate a possible pullback if the price fails to maintain its momentum towards the middle zone generating a rebound to the direction of the current checkpoint.
We are at a time of high volatility and systemic risks in these regions, which could further boost crude oil prices in the short term in what could be a change of uptrend for the long term. The price has recovered part of its price during the Asian session due to the aforementioned conflicts and also at the beginning of today's European session, the continuation of this upward pressure is clearly being perceived.
At the opening of the Asian session, prices started at $80.44 and are currently at $81.12, with a high for the day of $81.32, thus fracturing the bearish pennant figure that has been forming during the previous week's sessions. Technical analysis shows a possible bullish continuation towards $83.03 if the price manages to break above the $81.50 mark, which is the middle zone of the channel. However, it is important to note that trading volumes are not particularly strong at the moment and the trading bell marks us $80.96 as the most preponderant value at the checkpoint (POC). The RSI is slightly overbought at 61.21%, while the 200-day moving average is at 55.52%. These signals could indicate a possible pullback if the price fails to maintain its momentum towards the middle zone generating a rebound to the direction of the current checkpoint.
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