Technical Analysis
With U.S. crude losing ground on Wednesday, the line of 62.25 is under strong pressure in support. This is followed by support at 61.50. On the upside, we find resistance at 63.25.
Oil prices have retreated after the spike on Monday. Iran attacked a number of U.S. bases in Iraq on Wednesday, leaving nervous investors braced for a possible military response from the U.S.
U.S. crude prices have retreated in Wednesday trade. Currently, U.S. crude is trading at $61.57, down $1.14 or 1.83%. Brent crude oil futures are trading at $67.36, down $0.88 or 1.32%.
The markets remain volatile after a U.S. drone attack killed a top Iranian general on Friday. This has raised tensions in the Persian Gulf and throughout the Middle East. On Wednesday, Iran launched missile attacks at several U.S. bases in Iraq. It remains to be seen if U.S. President Trump will retaliate, or will we see a de-escalation of the situation.
With risk apprehension soaring, Brent crude prices briefly pushed above $70 on Monday, a level last seen in May 2019. Although crude prices have retracted since the spike on Monday, some analysts have raised the scenario of oil prices hitting $100 a barrel. There are fears that Iran could close the Straits of Hormuz, a narrow waterway through which 15 percent of the world’s oil passes through. If Iran does shut the waterway, it would severely disrupt oil exports and send crude to sky-high levels.
With U.S. crude losing ground on Wednesday, the line of 62.25 is under strong pressure in support. This is followed by support at 61.50. On the upside, we find resistance at 63.25.
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.