Crude Oil Price Analysis – Crude Oil Continues to Watch Geopolitics

Light Sweet Crude Technical Analysis

Oil pricing is trending higher as the geopolitical risk premium returns back to the market. The primary driver of the course is escalating tension between the United States and Iran, with the market pricing in potential disruptions in the Persian Gulf supply routes and possibly Iranian oil infrastructure.

OPEC+ is supposed to meet this Sunday with a production increase of 137,000 barrels per day expected in April. The group’s confidence in demand may provide a little bit of a floor against recent oversupply concerns. Really at this point, I think you need to pay close attention to the next several days and see how this plays out.

Ultimately, I do think that there is a little bit of concern here in the light sweet crude market that if we can break above $67.50, it could go to the $70 level. If we get a spike due to an attack in Iran, I think that is a short-lived event as we’ve seen multiple times in the past.

Brent Technical Analysis

Brent markets look much stronger and quite frankly, I think it’s pretty close to breaking above the $73 level. If we can, then we could go looking at the $79 level. Currently, the $70 level looks to be a support level in this market that probably holds things together.

Ultimately, I think oil is a buy-on-the-dip asset, but I don’t think any massive impulsive moves to the upside are to be followed, and in fact, probably get faded. I don’t like shorting, but would be interested if there was an impulsive move on news that is overdone, as we saw in June.