Oil took a hit yesterday in the evening on media reports saying that Israel has agreed to a Gaza ceasefire proposal. However, those reports were quickly rebuffed by Qatar, who is a mediator between Israel and Hamas, saying that no agreement was reached yet. Nevertheless, Qatar said this morning that Hamas has given an 'initial positive confirmation' to the 6-week ceasefire proposal, but there is still a long and tough road to a deal. Still, there is a general feeling that talks are progressing.
On the other hand, US officials said yesterday that they have made a decision on how to respond to a recent drone strike at a US military outpost in Jordan that killed 3 US servicemen, and that the US military is preparing to strike targets in Syria and Iraq. However, the exact timing as well as scope of the retaliatory strikes remains uncertain. Should the US military not limit itself to targets in Syria and Iraq, and strike directly into Iran, it would be a massive escalation that would almost certainly trigger Iranian retaliation.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile appHaving said that, there is a lot of risk for oil traders heading into the weekend. Potential Israel-Hamas ceasefire deal would be bearish for oil prices, while US-Iran escalation would be bullish. Nevertheless, Israel-Hamas deal does not look to be as imminent as US response to Jordan drone strike.
Taking a look at OIL chart at H1 interval, we can see that declines accelerated following a break below the neckline of the head and shoulders pattern. Price has almost reached a textbook range of the breakout from this pattern yesterday. The next major support zone to watch cane be found in the $77.25 area.
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
