Oil fell marginally in the early hours of trading in the New York session as the commodity looked to end the week on an uptrend. CFDs on the benchmark WTI crude were going for $76.39 per barrel at 9.00 am EST, with Brent trading at $81.63, down 0.04% and 0.09% respectively, from their opening levels. Notably, Thursday was the first time in February that WTI has crossed the $75 per barrel mark, creating momentum toward the $80 psychological barrier.
Oil has been under pressure from a strong US dollar over the past week, propelled by a series of string US economic data. Furthermore, the US oil inventory figures showed a spike in oil stockpiles for the week ending February 7th, putting more strain on oil prices. However, news of Israel’s rejection of Hama’s terms for a ceasefire in their four-month war has given impetus for renewed bullish view toward oil.
As the market cools down from the dollar’s rally, oil traders have turned their focus toward the Middle East. The deadlock in the Israel-Hamas ceasefire talks has elevated the likelihood of a ground offensive by Israel on Rafah city, a factor that could escalate the war and bring greater instability in the Middle East.
Meanwhile, there won’t be any impactful data released from the US until Tuesday, when the January Consumer Price Index (CPI) reading comes out. That means there’s currently more going on in favour of an oil price spike.
The Relative Strength Index (RSI) shows largely mixed signals, but a bullish control looks more likely. WTI will likely pivot around the 75.50 pivot level, with a bullish control pushing it to test the first resistance at 76.60. Further gains could see the commodity test 77.30. Alternatively, the commodity could head downwards under bearish control, with the first target at 74.50. A break below this level will invalidate the bullish view, possibly pulling the price further down to test the second support at $73.65.