Middle East Tension: Amidst Turmoil, Is Crude Oil Gearing Up for Positivity?

The price of crude oil was able to recovered from the days on Tuesday. Prices rose as fears of supply cuts – amid continued disruptions in global shipping and conflicts in the Middle East – fueled a strong recovery in prices this week.

However, the price category remained below the high a of the previous day, as large price increases were held back by concerns that inflation and longer-term higher interest rates will begin to affect demand.

U.S.-led forces conducted new strikes on the Iran-backed Yemeni Houthis in the Red Sea, after the group continued to attack ships in the region in solidarity with Palestine over the Israel-Hamas war.

The war also showed little signs of de-escalation, after the U.S. earlier in February shot down a United Nations resolution for a ceasefire, while Israel also rejected a proposal from Hamas.

Fears of supply disruptions, particularly in the Middle East, have provided oil prices with a floor in recent months, especially as the outcome of the Israel-Hamas war remains uncertain. Apart from this, Markets were also awaiting key economic cues from several major economies this week. Main focus will be on U.S. PCE price index data, which is the Federal Reserve’s preferred inflation gauge, and is largely expected to factor into the outlook for interest rates.

Technical Outlook – Crude Oil

Crude oil rebounded from the day’s lows of 6301. Prices rose to 6472 to reach 6466.00, compared to Friday’s close of 6353. The intraday gain was 1.78%.

On the chart above, prices are trading under a short-term triangle pattern. A bounce from the lower trend indicates that the price may soon test 6535, which is a huge resistance in the pattern.

Also, a break above 6535 will take prices to 6620-6720.00. Alternatively, on the downside, there is significant support at 6295, a break below which will reverse direction and prices could fall to 6230-6180.00

Commodity Samachar
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Also Read: US Consumer Confidence to Set the Market Tone? , Natural Gas: Will It Hit July 2020 Lows or Take a Rebound?

Recommended Read: Forex News letter : Is the Market Fixated on the US PCE Data?

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