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Crude Oil Prices Ignore Middle East Tensions, Focus on Weak Fundamentals

Crude oil
Crude oil

WTI Crude oil prices are trading 0.02% lower today at $52.57 per barrel, as oil prices search for equilibrium after the dismal macro data from the US that increased investors fears about global slowdown and the drone attacks against Saudi Arabia oil facilities on September 14. EIA reported yesterday a fourth straight rise in domestic crude oil supplies by 2.9mb for the week ended October 4th, after rising 3.1mb the last week. Market consensus was for an increase of 2.4 million barrels. The API reported a rise of 4.1mb. The crude oil prices rallied from the August 7th low at $50.74 up to $63.30 amid the attacks. However, as the oil supply from Saudi Arabia has been restored, the crude oil price has traded back to the levels seen before the attacks.

Crude oil price failed to hold some recent spikes higher as Turkey invaded Syria increasing the tensions in Middle East. Oil traders focus on crude fundamentals and ignore the new point of geo tensions in the East.

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WTI Crude Oil Support and Resistance

On the technical side, the bearish momentum is intact despite some intraday attempts higher, as the crude oil price trades below all the major daily moving averages. On the downside, immediate support stands at the daily low of $51.38, followed by the August 7th lows at $50.65. If the price closes convincingly below August low, it will pave the way for a move down to yearly lows at $45. On the upside, crude oil’s immediate resistance level stands at the daily high at 52.82, while more offers could emerge at 53.70 a zone where oil rejected twice the last trading sessions. Next barrier is the 50-day moving average at $55.35. Short positions in crude oil probably look safe as long as the price hovers below $53.00. Overall, the bears are in control, and any move higher will probably be considered as a selling opportunity.

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