Oil News: Crude Oil Outlook Stays Bullish Despite Steady Middle East Exports

Saudi Attacks Keep the Supply-Risk Premium Under Crude

Crude buyers are paying for the security of Middle East barrels, not a shortage of them. Exports are still moving, but attacks on Saudi targets, vessels and oil infrastructure have made those flows harder to trust.

At 10:49 GMT, December WTI crude oil futures are trading $101.29, up $1.82 or +1.83%. December Brent crude oil futures are trading $114.53, up $1.36 or +1.20%.

Daily December WTI Crude Oil Futures Technical Analysis

December WTI crude oil futures are edging higher on Friday for a second session after the market crossed to the strong side of a minor pivot at $98.31 on Thursday. Bullish traders are hoping to build on the move with a confirmation of the uptrend.

The main trend is up according to the daily swing chart. A trade through $101.37 will reaffirm the uptrend. The main trend will change to down on a trade through the swing bottom at $86.00.

The minor trend is also up. A trade through $92.46 will change the minor trend to down.

The short-term range is $86.00 to $101.37. Its retracement zone is potential support at $93.69 to $91.87.

Daily December Brent Crude Oil Futures Technical Analysis

December Brent crude oil futures are also edging higher on Friday. The main trend is up according to the daily swing chart. Today’s rally through $113.50 reaffirmed the uptrend, while the move through the historical high at $114.44 provided another confirmation. Taking out the intraday high at $114.72 will be further confirmation of the uptrend. That would put the next target at $119.50 on the radar. The main trend will change to down on a break through the swing bottom at $95.12.

The minor trend is also up. A trade through $105.95 will change the minor trend to down.

The nearest support is the retracement zone at $105.89 to $104.20. With the main trend up, new buyers may find this area attractive.

Saudi Attacks Are Overriding the Export Numbers

Middle East exports were near 17 million barrels per day last week. That says the barrels are still moving. Traders saw the number and kept buying anyway.

The Saudi attacks changed the reaction. Aramco evacuated its Dhahran headquarters, and the market is not assuming that the next cargo will move without a problem. That is keeping the premium under crude.

The next attack is the trigger. More damage or shipping trouble gives buyers another reason to add. A stretch without either gives sellers a reason to press the market.

Supply Relief Is Still a Future Story

There are potential sources of relief, but none of them changes Friday’s trade. Russia has agreed to lift its self-imposed diesel export ban and a tanker carrying Russian diesel is heading toward New York. That may help fuel availability at the margin, but it does not replace crude flows at risk in the Middle East.

Russia and Ukraine are also talking about possible U.S.-mediated peace talks next month. A deal that allows more Russian energy into world markets would be a bearish development for crude. There is no agreement, however, and it remains a future risk to the rally rather than a reason for traders to sell today.

The real question is still the same. Can the market keep paying a security premium while exports remain close to normal? For now, buyers are answering yes.

What to Watch

My bias for December WTI crude oil futures is to the upside because of the swing-chart uptrend and the market’s strong build over the 50-day moving average at $88.85. The next upside targets are the September contract high at $106.75 and the May contract high at $107.77. A close under $98.31 will soften my bullish expectation.

The confirmation of the uptrend in December Brent crude oil futures and the strong uptrending 50-day moving average at $98.04 support my strong upside bias. Potential targets include $119.50, $126.41 and $139.13. A change in the minor trend to down will weaken my outlook.

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