Oil Prices Rise AgainOil prices have risen around 1 dollar in the Asian session and continued a rise of almost 2 dollars per barrel at the European opening, driven by reports of possible conflicts in the Middle East and the expectation of adjustments in crude oil production. The situation has generated uncertainty among investors, who are seeking protection in the face of instability in the energy market. We continue to see the same upward trend movement as yesterday, only in this case, looking at the one-hour candlesticks, it is clear that the effect of yesterday's inventory news had a really strong effect on crude oil. Currently BRENT (Ticker AT: BRENT) and WTI (Ticker AT: LCRUDE) are trading at $74.42 and $70.75 respectively. It would not be unusual to see a rally towards $75.85 and $72.20 as target prices respectively as this is the area of strong bearish pressure if we look at the delta indicator. Currently RSI is highly oversold at 74.44% so this bullish burst might not be overextended, and generate a price suppression to the POC zone at $74 which is the POC zone for BRENT and $69.70 for WTI respectively.
Tensions in the Middle East
Recent reports indicate that Iran may be planning an attack against Israel from Iraq, using drones and ballistic missiles. According to Israeli intelligence, this move could occur before the U.S. presidential election on November 5. These types of tensions tend to raise oil prices, as any escalation in the region could impact global energy supply.
Influence of OPEC+ and global production
Prices have also been supported by the possibility that OPEC+ may decide to postpone the December production increase, given weak demand conditions and rising global supply. Sources close to the organization indicated that this decision could be made next week to stabilize the market in a context of volatility.
Additional factors: U.S. elections and China's economy
The approaching U.S. presidential election adds another level of uncertainty, as the candidates have different positions towards Iran and Russia, which could affect the relationship with oil producers.
Meanwhile, in China, growth in manufacturing activity during October, driven by economic stimulus, suggests a potential increase in oil demand. This data reflects a recovery in the Chinese economy after several months of contraction in the sector, which could influence the global energy market.
Inventories and production in the United States
In the United States, gasoline inventories reached their lowest level in two years due to a growing demand and a drop in crude oil imports, according to the Energy Information Administration (EIA). In addition, the country reached a production record of 13.4 million barrels per day in August, which may contribute to supply stability in the short term.
In conclusion, the combination of geopolitical tensions, OPEC+ production policies and demand factors in the United States and China are driving oil prices higher. This trend is likely to continue depending on the evolution of these factors in the coming days.
Ion Jauregui - Activtrades Analyst
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