- WTI in play near $85.00, trading flat after clipping higher following the weekend's Hamas-Israel conflict escalation.
- Crude Oil prices jumped as investors grow uneasy about geopolitical instability in the Middle East.
- Investors concerned about the potential for spillover from Gaza Strip into nearby countries, threatening major oil production in the region.
West Texas Intermediary (WTI) Crude Oil prices jumped on Monday after the long-running Gaza Strip conflict between Israel and Palestinian Hamas saw its largest escalation in over fifteen years. WTI barrels are trading near $85.00/bbl after the jump, from last week's lows near $80.60.
While Israel and Hamas are not major players in the oil scene, investors are concerned that geopolitics will spill over into neighboring Iran and Saudi Arabia, and a spreading conflict in the region could also threaten the stability of the Strait of Hormuz, a critical oil supply route that sees nearly a fifth of global oil distribution.
Iran, a public supporter of Hamas, has so far denied any connection or involvement in the Gaza conflict escalation, but market unease remains high about the possibility of further Iranian sanctions from the US, a supporter of Israel.
US politicians are doing little to assuage energy investor fears, with US Senator Lindsey Graham noting on Monday that the US should threaten Iranian oil infrastructure, stating that "If there is an escalation in this conflict, if hostages start getting killed, if Hezbollah in the north attacks Israel in strength, we should tell the Ayatollah we will destroy your oil refineries and your oil infrastructure." Oil barrel traders will be keeping a close eye on any rhetoric escalations from the US.
The US eased Iranian oil restrictions back in August as crude oil supplies drastically undershoot global demand, drawing down US oil reserves into record lows.
Keeping oil prices from spiraling out of control is slumping global demand for crude barrels and a massive overhang in gasoline reserves after refiners capitalized on recent spikes in crude prices, and investors will be looking out for further stimulus programs from China, which could re-ignite demand for oil, further constraining supply lines.
WTI Technical Outlook
WTI Crude Oil barrels climbed over 5.5% on Monday, and are currently splashing around near $85.00/bbl. Despite Monday's spike, WTI remains firmly lower from the recent peak of $93.98.
The recent chart decline in WTI barrel costs saw US oil prices tumble below a rising trendline from the June low of $67.14, and prices are currently hung up on the 50-day Simple Moving Average (SMA), with technical support coming from the 200-day SMA just south of the $78.00 handle.
WTI Daily Chart
WTI Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD climbs to daily highs near 1.0770 on Dollar selling
EUR/USD manages to regain extra upside traction on the back of the renewed sell-off in the Greenback, reaching fresh daily highs in the 1.0770 region, or. two-day peaks.
GBP/USD hovers around 1.2500 post-BoE
GBP/USD alternates gains with losses around the 1.2500 neighbourhood amidst extra weakness in the Dollar, while market participants continue to digest the BoE event.
Gold poised to resume its advance
XAU/USD now gathers fresh steam and advances to the highest level in many sessions north of the $2,330 mark per troy ounce on the back of further selling pressure hurting the Greenback as well as mixed US yields.
Solana meme coins TREMP, BODEN rise after Donald Trump’s pro-crypto stance
Solana-based meme coins TREMP and BODEN post nearly 125% and 7% gains on Thursday. Former US President Donald Trump says his campaign will likely accept crypto donations.
Bank of England inches one step closer to a summer rate cut
The Bank of England is undoubtedly turning more optimistic, but it’s keeping its options open amid some uncertainty surrounding the near-term inflation numbers. We still narrowly expect the first rate cut in August.