On Friday, trading in WTI oil futures on the NYMEX closed at USD 82.81 per barrel. And on Monday morning, they opened at a price of USD 85.25 and began to quickly rise in price, reaching 87.24. Natural gas prices have also risen sharply.
The reason is Saturday's attack on Israel. And, of course, associations arise with the oil crisis of 1973, when Arab oil-producing countries refused to supply raw materials to the United States and other allies that supported Israel. Then the price of a barrel rose from USD 3 to 12 in six months.
Is such a 4-fold increase possible after 50 years? The rise in oil prices seems to hint at this possibility. Nothing can be ruled out. Although the US created a strategic reserve as a result of the oil crisis, it was greatly depleted due to the fight against inflation.
Technical analysis of the WTI oil price market shows that:
→ the price pushed off the lower border of the blue ascending channel, finding support around USD 84;
→ the price may fall to the lower border of the downward red channel to close the gap;
→ resistance to growth can be provided by both the median line of the red descending channel and the psychological level of USD 90.
However, the main price driver should be expected to be news related to Israel and the position of Arab oil producers.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.