Crude oil prices have registered weekly highs in the early London trading session on Tuesday. WTI Futures were trading at $77.70 per barrel, a daily gain of 1.10%, at 10.53 am UTC. Similarly, Brent inched up 0.99%, to trade at $82.76. The market focus remains on the Middle East, as US President Joe Biden and Jordan’s King Abdullah II announced that key elements of a ceasefire deal were on the table.
Rising tensions in the oil-producing Middle East have kept global oil prices afloat, even on the back of concerns over China’s economy. Israel has been preparing a potentially definitive ground offensive in Gaza’s Rafah city, which could lead to a flare-up in the four-month war. Elsewhere, Yemen’s Houthi rebels have targeted ships plying the Red Sea in an “expression of support” for Palestine.
The world’s most traded commodity could most likely been trading lower, as China, the world’s largest importer, experiences an economic downturn. However, uncertainty surrounding the Middle East has bolstered bullish views on the oil market. Furthermore, an announcement by OPEC+ of a daily production cut of 2.2 million barrels has been countered by rising US production and efficiency gains.
The world’s largest oil cartel is scheduled to release its Monthly Oil Market report, which is expected to provide a detailed demand-supply outlook for the product. However, the greatest impact will likely come from Wednesday’s release of US crude oil inventories data. A higher-than-expected stockpile for the third week in a row would signal possible oversupply, exerting downward pressure on oil prices.
Technical Analysis
WTI crude oil price is pivoting around $76.60, with the RSI favouring upside momentum. Prices above 76.60 will support going long, with the first resistance likely to come at $78.10. Further gains below that point will likely see the bulls target $78.50. On the other hand, a break below the pivot to the first support at $76.10 will invalidate the bullish view. Further bearish control could see the market find the second support at $75.65.
WTI Crude Oil 30 minute chart