Crude Rallies on Saudi Oil Field Attack
Saudi Oil Field Strike
Oil prices are pushing higher again today with the crude futures market rallying on news of a drone attack on Saudi Aramco’s Shaybah oil field. The move comes amidst intensifying fighting between Saudi Arabia and Houthi militants backed by Iran and is offsetting the recent optimism we’ve seen over rebounding output levels in the Middle East. It has been widely reported in recent weeks that regional flows have now returned to pre-war levels and while this news initially saw oil prices cooling, renewed hostilities are now taking focus once again.
Russia-Ukraine Conflict
Alongside the attacks on Saudi Arabia we’ve also seen an uptick recently in attacks on tankers in the Strait of Hormuz, reminding traders that the shipping channel is still very much contested. Against this backdrop, oil prices look vulnerable to further upside near-term with news of any further escalation in tensions likely to drive bullish spikes in price action. Indeed, news of escalating attacks from Ukraine against energy infrastructure in Russia is also helping feed into bullish price action in crude. The week started with downside in oil amidst news that Trump would waive some sanctions against Russia as part of a diesel export agreement, aimed at coxing Russi into negotiating with Ukraine. However, with attacks heating up, oil prices failed to break lower and focus now sits firmly on further upside near-term while both conflicts burn on.
Technical Views
Crude
Oil prices continue to hold above the 95.06 level, supported by the bullish channel. While this structure remains intact, focus is on a fresh test of the 104.26 highs with 108.71 and the bull channel highs above. If we break sub-95.06, the bull channel lows will be first support to watch ahead of the deeper 84.60 level.
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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.