Oil prices decline amid focus on ceasefire talks between Israel and Hamas, as well as US inventories in focus.
FUNDAMENTAL OVERVIEW:
- The WTI price might increase due to concerns about supply risks amid heightened tensions in the Middle East.
- Israel carried out a strike on Rafah in Gaza while ceasefire negotiations were ongoing.
- Amos Hochstein, an energy adviser to President Biden, confirmed that the US has a significant oil supply in the SPR.
During Asian trading hours on Tuesday, the West Texas Intermediate (WTI) crude oil price remains around $78.50 per barrel. The oil prices saw a minor rise after Israel launched an attack on Rafah in Gaza. Meanwhile, negotiations for a ceasefire persisted without a resolution. According to Reuters, Israeli forces conducted air and ground strikes targeting Rafah, a location in Gaza that has provided refuge for over 1 million displaced Palestinians.
A cease-fire proposal from mediators was approved by Hamas on Monday; however, Israel rejected the terms, claiming they did not match its criteria. The ongoing turmoil in the Middle East has raised worries about possible interruptions to the region’s supply of crude oil, which has supported oil prices.
The market experienced a slight decline on Tuesday following reports suggesting that Russian Deputy Prime Minister Alexander Novak hinted at the possibility of OPEC+ increasing crude production.
OPEC and its allies, collectively referred to as OPEC+, have agreed to implement voluntary production cuts amounting to approximately 2.2 million barrels per day for the initial half of 2024. These reductions build upon previous cuts announced in stages since late 2022, culminating in a total reduction commitment of nearly 6 million barrels per day.
CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Crude Oil is trading within a down channel.
Crude Oil is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 79.15
Immediate support level: 77.40
HOW TO TRADE CRUDE OIL
After initially trading at higher prices, Crude Oil faced rejection and returned to the downside. Subsequently, it made another attempt to rise but failed to sustain momentum and experienced a sharp decline. It has broken below its previous day’s low and is trading lower, suggesting a sell-off on any attempts to rally.