Crude oil price rose slightly as concerns about the US-Iranian truce rose following the latest strikes against Iranian targets. Brent, the global benchmark, was trading at $93.85, while the West Texas Intermediate (WTI) rose to $90 a barrel.
US hits Iranian targets again
Brent and the West Texas Intermediate rose slightly after the US Central Command said that it launched new strikes against some Iranian targets overnight.
The military hit a ground control station in the port city of Bandar Abbas. It also attacked four Iranian drones. In a statement, officials said that the actions were measured, purely defensive, and intended to maintain the ceasefire.
Still, the attacks may push Iranians to retaliate, potentially leading to the resumption of kinetic activity between the US and Iran and negatively impacting the energy market.
The attacks came a few hours after President Donald Trump warned that he was not in a hurry to end the conflict. He said that the upcoming mid-term elections were not influencing his decision-making.
At the same time, he dismissed a draft of the deal showcased in Iran’s state television. The report said that the US had agreed to return some of the cash held in Qatari bank accounts. Also, the report said that the US agreed to remove its military from the vicinity.
Iran has insisted that it will only agree to a deal that meets its key requirements. For example, officials have said that they will control the Strait of Hormuz and charge an environmental management fee. They have also said that the agreement will simply postpone talks on nuclear.
A deal between the US and Iran will be bearish for crude oil prices as it will lead to more supply. Besides, hundreds of oil tankers are stuck near the Strait of Hormuz and the reopening wil;
Brent and the WTI benchmarks reacted to the latest US inventories report, which showed that stocks dropped by 2.8 million barrels after a 9.1 million barrel drawdown the previous week. Inventories fell by 2.9 million barrels in Oklahoma. They have increased by 22 million barrels this year despite the recent drawdowns.
Brent crude oil price technical analysis
UKOIL price chart | Source: TradingView
The daily chart shows that the Brent crude oil price pulled back sharply this week after Trump hinted of a potential deal with Iran. It dropped from last week’s closing price of $104 to the current $93.90.
The price has moved below the 50-day moving average. It also formed a large down-gap on Monday. Most importantly, it has formed a large double-top pattern at $114 and a neckline at $86.05. A double-top is one of the most common bearish reversal sign in technical analysis.
Therefore, the most likely crude oil price forecast is bearish, with the next key target to watch being at $86, its lowest point in March. A move below that price will point to more downside, potentially to the 61.8% retracement level at $81.75.
The alternative scenario is where it rebounds a bit in the near term as bulls attempt to fill the gap that was created on Monday.
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