Oil prices are experiencing upward momentum due to rising geopolitical tensions involving key oil producers, such as Russia and Iran. These concerns over potential supply disruptions are keeping prices elevated.
Last week, oil saw its largest weekly gain in two months after Ukraine launched a missile attack on Russia using U.S. and British weaponry. In response, Russia deployed a newly developed hypersonic missile, escalating the conflict.
In addition, Iran’s plans to expand its nuclear fuel production, which has drawn criticism from the UN atomic watchdog, have heightened global concerns. These developments add to fears of potential disruptions in the global oil market.
Rising Demand from Asia Supports Prices
Oil prices are also being driven higher by increased demand from two of the world’s largest oil importers, China and India. China’s crude oil imports surged in November, as lower prices encouraged stockpiling.
In India, refiners reported a 3% year-on-year increase in crude processing in October, reaching 5.04 million barrels per day. This growth was fueled by rising demand for fuel exports.
The combination of geopolitical risks and growing demand from Asia has helped maintain the bullish trend in oil prices. Market watchers are now closely monitoring any changes in geopolitical tensions and upcoming supply updates, as these could impact future price movements.
Technical Outlook: Key Price Levels to Watch
WTI crude oil is currently trading within an upward channel, with support from the 50-day exponential moving average (EMA) at $69.67. The Relative Strength Index (RSI) has dipped to 60.76, indicating a slight slowdown in bullish momentum.
Key Levels to Watch:
Resistance Levels: $71.47 (current resistance), $72.16, and $72.83.
Support Levels: $70.59 (pivot point), $69.87, and $68.86.
A sustained move above $71.47 could push prices toward the $72.16 level. However, if prices fail to hold above $70.59, a pullback to lower support levels may occur.
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