Crude oil prices rose over 2% on Friday, recovered from a two-day dip and positioning for a weekly gain as investors monitor Middle East developments.
With potential negotiations between Israel and Hamas on the Gaza conflict, traders remain alert to any possible Israeli actions against Iran. Market focus is also on potential OPEC+ output adjustments and the nearing U.S. election.
Middle Eastern tensions, combined with concerns of a potential supply surplus from increased non-OPEC+ production, have driven sharp oil price fluctuations this month.
Prices fell more than $3 a barrel in early Asian trade today, following an Israeli retaliatory strike in Iran over the weekend that avoided key energy sites, reducing immediate geopolitical risks. Both Brent and WTI futures opened at their lowest since October 1, with Brent at $72.88 and WTI at $68.65, each down over 4%.
Oil benchmarks gained 4% last week amid heightened volatility as markets factored in the potential extent of Israel’s response to an October 1 missile strike, along with the upcoming U.S. election. The geopolitical premium on oil prices, which had built up in anticipation of Israeli retaliation, eased, according to analysts.
This week, crude oil prices are likely to remain volatile due to ongoing Middle East tensions, with added fluctuations expected from the U.S. election, UK budget announcement, and U.S. jobs data.
Technical Outlook – Crude oil Futures
Crude oil prices recovered over 3% last week, rebounding from a low of 5831 to settle at 6040, up from the previous 5855 close.
Since October 18, prices have held above key support at 5755, consolidating just below resistance at 6080. Prices are expected to stay within this range, with a slight upward bias.
A dip toward 5890-5900 could offer a short-term swing opportunity targeting 6000-6080. Downside support is at 5755; a break below may lead to new multi-week lows at 5655-5590.
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