Oil (WTI) trades near $88 and might break above $90
Oil prices are pumping higher on Wednesday, setting forward a positive return for this week. The main driver for Oil prices is the visit from US President Joe Biden to Israel, which could not have been at a worse timing. Biden landed around 08:00 GMT in Tel Aviv, hours after a hospital was bombed in Palestine with hundreds of casualties. Biden is left to take a stance in the conflict while trying to defuse tensions, with any wrong word having the potential to make the current conflict between Israel and Hamas become a feared proxy war.
Meanwhile, The US Dollar (USD) is being torn in two camps. On the one hand, traders want to appreciate the Greenback with these tensions in the Middle East. On the other hand, the US macroeconomic numbers are starting to point to a possible recession for the US. Either way, the US Dollar is moving in tight ranges and is making baby steps lower for a third consecutive day when measured by the US Dollar Index (DXY). Crude Oil (WTI) trades at $86.80 per barrel, and Brent Oil trades at $90.35 per barrel at the time of writing. Oil prices are pushing higher as markets are pricing in a risk premium again. With several neighbouring countries starting to build up tensions on Israel to open up borders and let refugees flee the strip, pressure builds further toward a broader war. With that risk as hangover on the price action and possibly another big drawdown in US stockpiles, a pop in prices looks granted.
On the upside, the resistance level near $88 is the first level on the bulls’ radar. From there, the next level will be this year’s high at $94. Should a substantial squeeze unfold, look for $97.11, the high of August 2022. On the downside, traders are bracing for the entry of that region near $78. The area should see ample support for buying. Any further drops below this level might see a firm nosedive move, which would cause Oil prices to sink below $70.
On the upside, the resistance level near $88 is the first level on the bulls’ radar. From there, the next level will be this year’s high at $94. Should a substantial squeeze unfold, look for $97.11, the high of August 2022. On the downside, traders are bracing for the entry of that region near $78. The area should see ample support for buying. Any further drops below this level might see a firm nosedive move, which would cause Oil prices to sink below $70.