WTI Crude Oil trading flat after post-weekend surge, testing $85

WTI in play near $85.00, trading flat after clipping higher following the weekend's Hamas-Israel conflict escalation.
Crude Oil prices jumped as investors grow uneasy about geopolitical instability in the Middle East.
Investors concerned about the potential for spillover from Gaza Strip into nearby countries, threatening major oil production in the region.

Joshua Gibson FXStreet

West Texas Intermediary (WTI) Crude Oil prices jumped on Monday after the long-running Gaza Strip conflict between Israel and Palestinian Hamas saw its largest escalation in over fifteen years. WTI barrels are trading near $85.00/bbl after the jump, from last week's lows near $80.60.

While Israel and Hamas are not major players in the oil scene, investors are concerned that geopolitics will spill over into neighboring Iran and Saudi Arabia, and a spreading conflict in the region could also threaten the stability of the Strait of Hormuz, a critical oil supply route that sees nearly a fifth of global oil distribution.

Iran, a public supporter of Hamas, has so far denied any connection or involvement in the Gaza conflict escalation, but market unease remains high about the possibility of further Iranian sanctions from the US, a supporter of Israel.

US politicians are doing little to assuage energy investor fears, with US Senator Lindsey Graham noting on Monday that the US should threaten Iranian oil infrastructure, stating that "If there is an escalation in this conflict, if hostages start getting killed, if Hezbollah in the north attacks Israel in strength, we should tell the Ayatollah we will destroy your oil refineries and your oil infrastructure." Oil barrel traders will be keeping a close eye on any rhetoric escalations from the US.

The US eased Iranian oil restrictions back in August as crude oil supplies drastically undershoot global demand, drawing down US oil reserves into record lows.

Keeping oil prices from spiraling out of control is slumping global demand for crude barrels and a massive overhang in gasoline reserves after refiners capitalized on recent spikes in crude prices, and investors will be looking out for further stimulus programs from China, which could re-ignite demand for oil, further constraining supply lines.

WTI Technical Outlook

WTI Crude Oil barrels climbed over 5.5% on Monday, and are currently splashing around near $85.00/bbl. Despite Monday's spike, WTI remains firmly lower from the recent peak of $93.98.

The recent chart decline in WTI barrel costs saw US oil prices tumble below a rising trendline from the June low of $67.14, and prices are currently hung up on the 50-day Simple Moving Average (SMA), with technical support coming from the 200-day SMA just south of the $78.00 handle.

WTI Daily Chart

WTI Technical Levels

WTI US OIL

Overview
Today last price	84.62
Today Daily Change	-0.48
Today Daily Change %	-0.56
Today daily open	85.1

Trends
Daily SMA20	88.41
Daily SMA50	84.71
Daily SMA100	78.78
Daily SMA200	77.45

Levels
Previous Daily High	86.01
Previous Daily Low	81.69
Previous Weekly High	90.88
Previous Weekly Low	80.63
Previous Monthly High	93.98
Previous Monthly Low	83.09
Daily Fibonacci 38.2%	84.36
Daily Fibonacci 61.8%	83.34
Daily Pivot Point S1	82.52
Daily Pivot Point S2	79.95
Daily Pivot Point S3	78.21
Daily Pivot Point R1	86.84
Daily Pivot Point R2	88.59
Daily Pivot Point R3	91.16

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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