Crude Oil News | Price roller coaster amid Israel-Palestine conflicts?

Crude prices posted more than five percent gain. It had a volatile swing last week in anticipation that the Israel-Hamas conflict could make a hurdle for disruptions in supply from the world’s biggest oil producing region. But this was somewhat offset by signs of cooling U.S. demand and higher production.

The geopolitical tension continued to hold crude oil volatile, as Israel’s Prime Minister Benjamin Netanyahu on Sunday vowed to “demolish Hamas,” as his troops prepared for a ground assault on the Gaza strip, in retaliation for a series of deadly strikes by the terrorist group Hamas against Israeli border towns.

But U.S. President Joe Biden said any Israeli occupation of the Gaza Strip would be a “big mistake,” although he still called the termination of Hamas a “necessary requirement.”

Any new headlines of conflict spilling over into the broader Middle East region is expected to support oil prices, given that they herald disruptions in supply. Specifically, Iran’s joining in the conflict has been in close focus, given that the country is the world’s fifth-largest producer of oil.

Apart from this, Chinese major economic data is set to release this week, which will add further volatility. China growth is expected to have deteriorated further through the quarter, pointing to a weak outlook for fuel demand in the country.

Adding to this, Inflation data from Japan will have to closely watch and is expected to offer more cues into the Bank of Japan’s plans to begin tightening monetary policy.

Technical Outlook

 Crude oil posted 5.50% weekly gain last week. Prices recovered from the low 6883 and made a high 7278, before closing at 7292.00.

Weekly price action resulted in formation of a bullish harami candlestick, which is indicating for a bullish momentum in the near future. However, it would need to break above immediate resistance 7388 in order to test 74450-7580 next resistance. Else, any short-term dip towards 7200-7150 could attract near term buying activities.

Alternatively, on the downside crucial support is seen at 7025 and a break below it prices may retreat towards 6880-6680.00.

Overall trend is expected to remain volatile, but supply concern over geopolitical conflict will provide support to the oil prices.