CRUDEOIL Analysis
Afternoon: Crude Oil Outlook Amid Middle East Tensions and Demand Concerns
Highlights:
- Crude oil rises to $70.5 as Middle East tensions fuel supply concerns, with markets watching Israel’s response to Iran's missile attack.
- Demand worries persist with Eurozone contraction and China’s sluggish growth, while US refinery activity shows strength.
- Key levels: Support at $69.20, resistance at $71.80; recommended action is to sell around $70.60 targeting $69.50 with a stop loss above $71.60.
Overview:
Crude oil prices rose to around $70.50 as the market continued to monitor escalating geopolitical risks in the Middle East. Although diplomatic efforts persist, the ongoing exchange of heavy fire has heightened concerns about potential supply disruptions in the oil-rich region. Investors remain particularly focused on Israel's anticipated response to Iran's recent missile attack, which could further impact oil flows and market stability.
Meanwhile, demand concerns are weighing on oil prices. In the Eurozone, business activity has once again stalled, with the latest data indicating a contractionary trend, raising questions about the demand outlook in Europe. In Asia, traders are awaiting more clarity on China’s latest stimulus measures aimed at reviving its slowing economy. China, the world’s largest oil importer, has shown signs of sluggish demand amid weaker economic growth, which is impacting global crude demand projections.
However, the United States provides some positive signals, with refinery processing hitting its highest seasonal levels in six years, indicating strong domestic demand. Despite this, concerns about a potential global oil surplus in the coming quarters are keeping prices under pressure.
Key Economic Data to Watch:
- Eurozone: Spanish Unemployment Rate, German Ifo Business Climate
- US: Core Durable Goods Orders m/m, Durable Goods Orders m/m, Revised University of Michigan Consumer Sentiment
Trade Action:
Consider selling on a price jump around $70.60, with a target of $69.50 and a stop loss above $71.60.
This mixed outlook highlights the complex factors shaping the oil market, balancing geopolitical risks with varied demand signals across key economies.
Support and Resistance Levels:
