WTI Crude Oil Holds at $77.20 Amid Iran-Israel Tensions and Key Economic Data
Oil prices remained stable in Asian trading on Monday, holding onto gains from last week’s rebound.
Oil prices remained stable in Asian trading on Monday, holding onto gains from last week’s rebound.
This stability comes as reports suggest an Iranian strike on Israel may be imminent, adding a significant geopolitical risk premium to oil prices.
Israeli intelligence, as reported by Axios on Sunday, believes that Iran may retaliate against Israel in the coming days for the killing of Hamas leader Ismail Haniyeh in Tehran last month.
Over the weekend, Israel continued its offensive in Gaza, making the prospects of de-escalation in the region appear slim.
These developments have heightened fears of a broader conflict in the Middle East, which could disrupt oil supplies from one of the world’s most crucial crude-rich regions.
Impact of Economic Data on Oil Markets
The outlook for oil prices is also being shaped by recent economic data, which has provided some relief to markets concerned about a potential U.S. recession.
Oil prices were little changed in early Asian trading on Monday, holding on to most of last week’s more than 3% gains, supported by geopolitical tensions and better economic data.https://t.co/XQC1LlJV4Y#oilprices pic.twitter.com/jf9naUkMdH
— Business Recorder (@brecordernews) August 12, 2024
Encouraging data from the U.S. last week suggested that the world’s largest fuel consumer might avoid a recession, boosting optimism among traders.
This week, attention is focused on inflation readings from several major economies, particularly the U.S. The Consumer Price Index (CPI) data, due on Wednesday, is expected to show a cooling in inflation for July.
This cooling trend could strengthen expectations of interest rate cuts by the Federal Reserve in September, potentially providing further support to oil prices.
Inflation data from India, a major oil importer, is also due on Monday, with similar expectations of cooling inflation.
Additionally, CPI data from the UK is set for release on Wednesday. The combination of these reports could significantly influence market sentiment and oil price movements throughout the week.
🌐 Global markets on edge as uncertainty📉 looms ahead of Wednesday's US Dollar #CPI data release. Will inflation spike or cool off? Investors💰 Brace for impact📊 #Investing pic.twitter.com/vU1QI8g3va
— Oblivion Investing (@oblivionInv) August 12, 2024
Looking Ahead: OPEC and IEA Reports to Influence Prices
Beyond the immediate geopolitical risks and economic data, traders will also be paying close attention to monthly reports from the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
These reports are expected to provide further insights into the global oil market’s supply-demand balance and could impact price forecasts.
Before last week’s rebound, oil prices had been under pressure for four consecutive weeks, driven by fears of slowing economic growth in major oil-consuming countries like the U.S. and China.
However, the recent data suggests a less severe economic downturn has helped stabilize the market, although the potential for volatility remains high given the ongoing geopolitical risks.
WTI Crude Oil Price Forecast – Technical Outlook
WTI Crude Oil is currently trading at $77.19, showing signs of a bullish continuation. The 4-hour chart indicates that the price has crossed above the key pivot point at $76.46, signalling potential further upward movement.
Immediate resistance is identified at $78.65, with higher resistance levels at $80.00 and $81.29. On the downside, support is found at $75.11, with additional support levels at $73.70 and $71.77.
The Relative Strength Index (RSI) stands at 65.14, reflecting strong bullish momentum. The 50-day Exponential Moving Average (EMA) is positioned at $75.76, providing immediate support.
With the price hovering above this level, the bullish trend is likely to continue, potentially leading oil prices towards the $78.65 resistance level.
Conclusion: Buying opportunities exist above $76.50, but caution is advised if the price drops below this level, as it could signal increased selling pressure.
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