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Crude Oil Price Forecast – Crude Oil Reacts to Attacks in Iran

By:
Christopher Lewis
Published: Apr 19, 2024, 14:18 GMT+00:00

The crude oil markets have been very…interesting. This is a situation where there are a lot of traders willing to react to the latest headlines coming out of the Middle East.

In this article:

WTI Crude Oil Technical Analysis

Crude oil has been all over the place during the trading session on Friday as Israel hit Iran with some type of air strike. And of course, it caused massive tension and panic in the market. At one point, we were up 5% overnight, but we have since seen the market turn around completely.

The West Texas Intermediate crude oil market is hanging around just above the 50 day EMA and looks like it could drop towards the $80 level. That being said, this is a market that has just shown how sensitive it is to Middle Eastern tension, which should not be a huge surprise. But at this point, we have to look at $80 as a potential support level.

At this point, there are a lot of different things moving crude oil markets, not the least of which would be some type of conflict between Iran and Israel. But you also have conditions in interest rates. You know whether or not they are going to loosen interest rates. And if they do, that tends to drive up demand for oil.

The supply, the build, that type of thing. The economic condition in the United States is fairly strong, but the rest of the world looks like it’s rolling over. And if that’s going to be the case, demand for crude oil might be somewhat limited. I still think that the cyclicality of this market will turn it around eventually, but we’ve seen so much chaos in the last 24 hours that I anticipate that we will continue to see more rangebound trading.

Brent Crude Oil Technical Analysis

Brent obviously looks very much like the WTI market and at this point, the $84.50 level underneath continues to be support. And much like the WTI market, we are sitting on top of the 50 day EMA. It’s worth noting that we turned around right at the $90 level in the Brent market. So perhaps that’s part of what’s going on here, a little bit of a technical resistive area.

But nonetheless this is not a market that you can get aggressive in. I am looking for dips to buy, but I’m also looking for stability. Furthermore, it’s difficult to imagine a lot of people throwing a lot of money into the oil market heading into the weekend when we just don’t know what could happen.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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