Technical Analysis
Crude oil has moved sharply higher on Friday. In the Asian session, crude broke above resistance at 63.25. Above, there is resistance at 64.20. On the downside, we find support at 62.25, followed by the round number of 61.00.
Oil prices have soared on Friday, in response to a U.S airstrike which killed a top Iranian general. Crude briefly pushed above $64, its highest level since April.
Crude has soared in Friday trade. Currently, West Texas Intermediate futures are trading at $60.89, up $2.34 or 3.89%. Brent crude oil futures are trading at $69.00, up $2.76 or 4.17%.
A U.S. airstrike on Baghdad airport killed a top Iranian general early on Friday. Qassem Soleimani was the head of the Revolutionary Guards, and his death has sent tensions in the Middle East to a fever pitch. The attack has shaken the markets, as crude oil has jumped by 4.0%, its highest one-day rise since September. That spike also involved Iran, which attacked a Saudi oil refinery and sent oil prices up by 12.8 percent. Iran has promised to retaliate, and further clashes between Iran and the U.S. could send oil prices still higher. At the same time, traders should keep in mind that oil prices subsided after the huge September spike and these gains were erased just two weeks later.
The Energy Information Administration (EIA) weekly crude inventory report will be released later on Friday. This was expected to be the key event of the day, but of course has been overshadowed by the U.S. killing of an Iranian general. Over the past several months, EIA reports had pointed to a large oversupply of crude, but that trend has shifted lately, with three declines in the past four weeks. The upcoming report is also expected to show a decline, with a forecast of -3.1 million barrels. If the estimate is within expectations, we could see upward pressure on crude prices on Friday.
Crude oil has moved sharply higher on Friday. In the Asian session, crude broke above resistance at 63.25. Above, there is resistance at 64.20. On the downside, we find support at 62.25, followed by the round number of 61.00.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.