Crude Oil News Today: Prices Stabilize as Immediate Supply Threats Subside

James Hyerczyk
Published: Apr 19, 2024, 09:57 GMT+00:00

Key Points:

  • Light crude initially up 3% after Israeli attack on Iran.
  • No immediate oil supply threats after initial market fears.
  • Rising global oil inventories temper bullish sentiment.
Crude Oil News Today

In this article:

Volatile Start to Today’s Session

Light crude oil futures experienced a slight increase on Friday, initially surging by 3% following an Israeli attack on Iran, only to give back most of these gains. The escalation briefly stoked fears of potential supply disruptions but these concerns receded as it became apparent that there were no immediate threats to oil flow. Despite ongoing Middle East tensions and significant U.S. economic data, U.S. crude prices have dropped 6.5% from last week’s 2024 highs.

At 09:43 GMT, Light Crude Oil Futures are trading $82.52, up $0.42 or +0.51%. The high of the session is $85.64.

Geopolitical Tensions and Market Impact

The market’s initial reaction was fueled by fears of escalating conflict potentially affecting critical regions pivotal for oil transit. Although the immediate threats to supply chains were mitigated, the situation remains fluid with traders closely monitoring any further developments that could affect supply.

Supply Concerns Amid Rising Inventories

Recent reports indicate a substantial increase in global oil inventories, adding approximately 1 million barrels per day in the first quarter alone. This increase has been a critical factor in tempering the bullish sentiment typically associated with geopolitical unrest.

Strategic Reserves and Economic Indicators

Additional factors influencing the market include poor economic performance from China and signals from the U.S. about possibly releasing more reserves from its Strategic Petroleum Reserve to stabilize prices. Moreover, new sanctions on Iran targeting its unmanned aerial vehicle production, although not directly affecting its oil industry, highlight the ongoing geopolitical and economic tensions influencing the market.

Short-Term Forecast

The short-term outlook for oil is bearish, dominated by high global inventory levels and the reduced immediate impact of Middle East tensions on supply channels. While the market remains alert to potential geopolitical escalations that could disrupt supply routes, the current supply overhang is likely to keep prices in check. Investors should remain vigilant, monitoring both geopolitical developments and strategic policy shifts that could sway market conditions.

Technical Analysis

Daily Light Crude Oil Futures

Today’s surge then rapid turnaround indicates the presence of sellers, setting up light crude oil futures for further downside pressure. Obviously, traders are selling rallies and likely to continue as long as demand issues persist and there isn’t an offsetting disruption in supply. This puts trader eyeballs on the 50-day moving average at $80.10. This indicator is controlling the intermediate trend.

Watch for a technical bounce on the first test of the 50-day MA, if it fails then look for the selling to extend into the 200-day moving average at $78.03. This is controlling the longer-term trend.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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