- The oil price strengthens as investors hope that US Biden’s blame on Palestine for bombing at Gaza hospital would deepen Middle East conflicts.
- Supply chain disruptions due to Israel-Palestine conflicts would dry the oil supply in an already tight oil market.
- WTI oil rises above the 50% Fibo retracement at $87.36.
West Texas Intermediate (WTI), futures on NYMEX, strengthened after the blast at the Gaza hospital in which around 500 civilians were killed provoked unrest among the general public. The oil price rose sharply to near $88.00 as conflicts between Israel and Palestine are seen worsening further.
Meanwhile, the visit of US President Joe Biden to Israel has pushed the risk-appetite theme on the backfoot. Biden blamed Palestine for hundreds of casualties after the explosion at Gaza hospital, not Israel. The visit of Biden to Jordan has been canceled as the summit has been called off due to civil unrest in Gaza.
Earlier, Iran warned Israel to stop attacks on Gaza otherwise it would not be a spectator in the war situation. The Middle East crisis would deepen if Iran intervenes in the conflicts as it will result in the disruption of the supply chain. This would dry the oil supply in an already tight oil market.
Going forward, investors will focus on the oil inventory data for the week ending October 13, which will be released by the Energy Information Administration (EIA). As per the estimates, oil stockpiles were drawn by 0.3 million barrels last week.
WTI oil rise above the 50% Fibonacci retracement plotted from (September 28 high around $94.00 to October 06 low at $80.36) at $87.36. The 50-period Exponential Moving Average (EMA) at $85.65 continues to provide support to the oil price bulls.
The Relative Strength Index (RSI) (14) shifts into the bullish range of 60.00-80.00, ensuring more upside ahead.
Fresh upside would appear if the oil price will break above 61.8% Fibo retracement around $89.00, which will expose the asset to the psychological resistance at $90.00, followed by October 2 high at $92.10.
In an alternate scenario, a breakdown below October 6 low at $80.63 would expose the asset to August 29 low at $79.21 and August 24 low at $77.53.
WTI two-hour chart
-638332244706226828.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.