Oil News: Crude Oil Futures Eye Breakout as Geopolitical Risks Surge

Light Crude Poised for Upside Breakout

Light crude oil futures are edging higher on Friday, in a position to overtake the 50-day moving average at $58.58. Taking out the swing top at $58.88 will change the trend to up and indicate the buying is strengthening.

The daily chart indicates there is room to run to the upside with the retracement zone at $60.70 to $62.05 the next major target area. If there is enough upside momentum, the 200-day moving average at $62.50 could get tested.

On the downside, the key support area is $56.93 to $56.47. The main trend will resume on a trade under $55.76. This is also the new secondary higher bottom so it carries some weight.

At 12:32 GMT, Light Crude Oil Futures are trading $58.29, up $0.53 or +0.92%.

Geopolitical Tensions Drive Supply Concerns

Iran moved into the headlines again as traders grew more concerned about a potential disruption to its crude oil output. Discussions over Venezuelan crude oil supply continued with traders also weighing disruption concerns, while worries over the spread of the Russia-Ukraine war are another factor being watched for supply issues.

Iran: Civil Unrest Escalates

In Iran, the protests appear to be gathering momentum. Escalating civil unrest leading to a supply disruption is a potentially bullish development. Meanwhile, the government has cut off access to the internet, internet monitoring group NetBlocks said on Thursday.

Venezuela: Political Transition Creates Uncertainty

The situation in Venezuela seems to have gone from good to worrisome because it doesn’t look like the transition is going as smoothly as expected. Early in the week, the Trump Administration strongly indicated it was running Venezuela’s oil industry, but Trump is now demanding that the country give the U.S. full access to its oil sector just days after it removed the country’s president Nicolás Maduro on Saturday.

U.S. officials have said Washington will control the country’s oil sales and revenue indefinitely, a matter likely to be discussed when Trump meets with the major oil companies and trading houses on Friday to discuss Venezuelan export deals.

Russia-Ukraine Conflict Intensifies

Regarding Russia and Ukraine, the Russian military said on Friday that it had fired its hypersonic Oreshnik missile at targets in Ukraine. The targets included energy infrastructure supporting Ukraine’s military-industrial complex, the Russian defense ministry said in a statement that Reuters reported. This is an escalation of the war that could lead to a supply disruption.

Market Outlook

Looking ahead, the fear of a supply disruption has brought the market poised for a breakout over the 50-day moving average at $58.58. This is where your focus should be today because it could create the momentum needed to eventually challenge the 200-day moving average at $62.50.

More Information in our Light Crude Oil Futures.