Middle East Oil Impact
Oil prices are trading higher at the start of the week with crude futures extending gains from last week. The market is now up around 8% from last week’s lows as bullish sentiment continues to grow. One of the key upside drivers currently, is the growing speculation that an Iranian retaliation against Israel is imminent on the back of Israel killing a top Hezbollah leader earlier this month in Lebanon. With further strikes in Lebanon over the weekend seeing the killing of a top Hamas political leader, fears of a counterattack are keeping oil prices well supported here, raising the threat of supply disruption in the region if broader violence breaks out.
Russia/Ukraine War
Alongside the precarious situation in the Middle East oil prices are also being buoyed by the news of the Ukrainian invasion of Russia in recent days. Following successes in pushing Russian forces out of Ukraine, the Ukrainian army has now pushed around 30km into Russian territory, the first such invasion since WWII. The intensifying violence there is again raising the potential for supply disruption.
What to Watch This Week
While both these two situations continue to develop, oil prices look likely to remain well-bid near-term, particularly if we get news of an Iranian counterattack against Israel this week. Today, focus will also be on the latest OPEC monthly report with traders keen to see how adherence to quotas has been as well as how the group views the current demand landscape. Finally, a slew of US data will be on watch this week with recession fears there still a key focus point for traders.
Technical Views
Crude
The rally off the 72.61 level has seen the market turning sharply higher. Price is now testing the 77.64 level and with momentum studies turning higher the focus is on a break here with 82.59 and the bear channel highs the next resistance zone to note above.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.