Crude Oil Price Analysis – Crude Oil Rallies as Middle East Risk Escalates

Crude Oil Technical Analysis

The Light Sweet crude oil market has rallied rather significantly during the early part of the trading session on Wednesday as missiles continue to fly at this point in time in the Middle East. We had the Iranians attack the US base in a sudden fashion overnight, and traders are likely to continue to look at this as a scenario that threatens more global supplies.

It is a little odd that we had fallen as far as we had, mainly due to the fact that there were still no tankers getting through the Strait of Hormuz. But now, it seems like things are only going to get worse again. With that, you get the appropriate bounce in crude oil pricing from the 200-day EMA.

Middle East Conflict and Federal Reserve Decision Drive Oil Volatility

The Brent markets have bounced from the crucial $85 level as well. That is an area that has been important; the 200-day EMA has been support. This is an indicator that has been important more than once in the past.

So, with this market breaking out and above the 50-day EMA opens up the possibility of a move to higher levels. At this point, it looks well supported, and it does make a certain amount of sense that oil rallies in this environment, but adding more fuel to the fire will be the Federal Reserve later today making an interest rate decision, which could cause volatility in and of itself. With this, things are about to pick up again, more likely than not, as the volatility could get aggressive again.

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