Oil prices are on the rise today, with Brent (OIL) and WTI (OIL.WTI) trading almost 3% higher on the day. There is a number of factors in play today, that are supporting crude prices. The main one is a still-tense situation in the Middle East:
- Houthi rebels from Yemen said that they have targeted another commercial vessel in the Red Sea, showing that US-led coalition is not a big enough deterrent
- A bomb attack took place in Kerman, Iran at the memorial for Qasem Soleimani, head of Iran's Quds Force, who was killed in US drone strike in Baghdad, Iraq in 2020. Iranian media say that over 100 people have been killed in two explosions in Kerman city
- Some Iranian officials were quick to blame Israel for the attack. However, Israel did not confirm, nor deny its involvement in the attack. Nevertheless, the attack raises the risk of escalation across the Middle East as Iran said it will not go unpunished
Apart from Middle East developments, oil prices are also supported by other news today:
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Open account Try demo Download mobile app Download mobile app- Libya's Sharara oil field, producing around 300k barrels of oil per day, was fully shut down in response to protests
- It was also reported that United States are seeking 3 million barrels of oil with April delivery for Strategic Petroleum Reserve refill
- OPEC+ issued a joint statement re-affirming oil producers' commitment to unity, easing some concerns after Angola exited the group last month
Taking a look at Brent chart (OIL) at H1 interval, we can see that a recent pullback was halted at the $75.40 support zone this morning, and price started to recover afterward as news of Libya's oil field shutdown support sentiment on the oil market. Bomb attack in Iran as well as news of US seeking 3 million barrels for SPR relief, provide more fuel for the recovery move.
OIL broke above an important, short-term resistance zone in the $77 area, marked with 50-hour moving average (green line), previous price reactions as well as the upper limit of the local market geometry. In theory, this means that short-term trend has changed to bullish. However, a break above the $79 resistance zone, marked with previous price reactions and 200-hour moving average (purple line), would be needed to paint a higher high and snap a short-term downtrend sequence.
Source: xStation5
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