Crude oil price action for the WTI blend has started the week on a muted note, but is still trading lower after hitting the top end of last week’s price range. Crude oil price has consolidated within a narrow range that is formed by the 54.20 mark acting as the ceiling, and 52.28 acting as the floor.
Over the weekend, a fire incident was reported at an Iranian oil tanker that was in Saudi continental waters after it was allegedly hit by a rocket. This set off initial speculations that there had been some sort of retaliation by Saudi government for last month’s drone strikes on Saudi Aramco’s facilities.
However, Iranian authorities quickly dispelled the rumours, even as they acknowledged that the damaged vessel had been hit by missiles which caused a fire.
The news was not enough to cause any market panic and as at the New York session on Monday, crude oil price is trading with low volatility.
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Technical Outlook for WTI Crude Oil
Crude oil price is presently nestling the 52.78 area, after hitting intraday highs of 54.07. It is therefore approaching the immediate support and floor of the range at 52.28 (Aug 9 and Oct 2 lows). A break below this area would target the August 7 low of 50.47; site of the troughs that formed the double bottoms seen in June 2019.
The near-term resistance of 54.20 (23.6% Fibonacci level) remains intact, having been tested on Friday without being violated. This is also where the neckline of the double bottom was formed. I would expect an upside violation of this price level to open the door for an approach to the next resistance at 55.73 (March 5 – 11 lows as well as lows of July 19 -29).
Therefore, the price range that exists between 52.28 and 54.20 remains intact until a market fundamental increases volatility.