Crude oil climbs by $1, with attention on the Middle East crisis and efforts to combat inflation.
FUNDAMENTAL OVERVIEW:
On Tuesday, crude oil prices increased, recovering from the previous session’s decline. Market considerations balanced Middle East tensions with concerns about demand and the growing supply from OPEC.
Analysts noted that on Tuesday, prices received support from geopolitical tensions in the Middle East and an ongoing supply disruption in Libya.
The energy sector team lead at DBS Bank, mentioned, “Regarding the supply aspect, there are certain positive factors stemming from the shutdown of Libya’s largest oilfield, impacting approximately 0.3 million barrels per day of oil production.”
Despite the maritime attacks by Yemeni Houthi militants, major shipping companies, including Germany’s Hapag-Lloyd, are opting to steer clear of the Red Sea. Hapag-Lloyd announced on Tuesday its decision to continue diverting vessels around the Cape of Good Hope.
The Israeli military has declared its intent to persist in the fight against Hamas until 2024 in the Gaza war. This has raised concerns in the markets about the potential escalation of the conflict into a regional crisis, posing a threat to the stability of Middle Eastern oil supplies.
Oil benchmarks are recovering from losses of 3% and 4% recorded on Monday, a reaction to significant reductions by leading exporter Saudi Arabia in its official selling prices (OSP).
BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Brent Crude Oil is currently trading within a down channel.
Brent Crude Oil is positioned above 5&20 the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 77.66
Immediate support level: 75.56
HOW TO TRADE BRENT CRUDE OIL
After a substantial decline, Brent crude oil found support and stabilized, subsequently attempting an upward move. Currently, Brent oil has surpassed its previous day’s high and is approaching a crucial resistance zone. If this zone is breached, we can anticipate further upward momentum.
TRADE SUGGESTION- STOP BUY– 78.68, TAKE PROFIT AT- 81.64, SL AT- 76.88.