Crude oil bounced from a key trendline after reports that US and Israeli militaries developed plans for renewed strikes on Iran. Intensifying Houthi attacks on Saudi Arabia added to supply disruption concerns. Investinglive says prices are likely to remain supported unless tensions ease.
Crude oil bounced from a key trendline after reports that the US was reducing its troop presence at bases across the region and cutting staffing at diplomatic missions amid rising security risks. The bullish momentum then picked up after The New York Times reported that the US and Israeli militaries had developed plans for renewed strikes on Iran following the US midterm elections.
According to that report, additional forces are expected to be fully deployed by early November. As a result, investinglive says, the prospect of another US attack on Iran has raised the geopolitical risk premium in oil.
Houthi attacks on Saudi Arabia add to supply worries
Meanwhile, the Saudi-Houthi conflict continues to pose a significant threat to energy infrastructure. The Houthis have intensified attacks against Saudi Arabia, targeting airports, military facilities and energy assets.
Because of this, investinglive expects oil prices to likely continue rising unless the Saudi-Houthi conflict de-escalates or US-Iran negotiations produce a surprising breakthrough.
Technical picture points to 110.00
On the daily chart, crude oil (CFD contract) has been consolidating above the 96.77 level, although momentum seems to be picking up. Buyers will likely continue to target the 110.00 resistance, with defined risk below 96.77.
If the price reaches that level, investinglive expects sellers to step in to position for a drop back into the lower bound of the channel. In the meantime, US Jobless Claims and Flash PMIs are the next data points, but the focus remains on Middle East developments.
Source: Investinglive
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