Crude is Ripping, but Where To?Crude Oil (October)
Last week’s close: Settled at 74.83, up 1.82 on Friday and down 0.71 on the week
Crude Oil rose sharply overnight after an Israeli strike on Hezbollah targets in Southern Lebanon, and Libya’s eastern government said it will halt exports.
The two events, while unrelated, are the main cause for the sharply higher trade in Crude Oil this morning. Libya’s eastern government’s choice to halt oil production and exports was the result of a continued political tussle over the country’s central bank. Israel sent over 100 warplanes to strike thousands of Hezbollah missile launchers on Sunday - a flare-up in tensions amidst continued ceasefire talks. Furthermore, Hamas said yesterday “that U.S. talk of an imminent ceasefire deal is false and serves election purposes.”
Libya was set to export 1 million bpd of crude oil in August. A retraction of Libyan barrels from the export markets may cause ripple effects this week as geopolitical tensions continue to flare and OPEC continues mulling their planned production increases.
WTI Crude Oil futures are trading out above 76.75, the 50% retracement from the August 5th low back to the July 5th high. Previous resistance now defines support at 75.36-75.73 and again below there at 74.52-74.85, aligning with Friday’s settlement. Theis defines a clear blueprint for the bulls to hold the driver’s seat. Still, there is strong overhead resistance lurking at 78.13-78.54, but a move above could encourage forced buying.
Bias: Bullish/Neutral
Resistance: 78.13-78.54***, 79.85-80.00***
Pivot: 76.75
Support: 75.36-75.73***, 74.52-74.85***, 74.16-74.38***
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