Crude oil futures ended the day at $67.38, marking a decrease of -$4.40 or -6.13%. Throughout the day, the price fluctuated between a low of $66.94 and a high of $68.84. The drop in prices was primarily driven by the limited Israeli retaliation against Iran, which fortunately spared oil facilities from any damage. However, various other factors are at play that could either bolster or weaken oil prices in the near future.
One key aspect to consider is the duration of the conflict between Israel and Iran, as well as the possibility of further strikes, which could provide some support for oil prices down the line. Additionally, a reduction in crude oil stored on tankers is seen as a positive sign for prices. On the flip side, concerns about weak demand in China and an increase in Libyan oil output are weighing on prices.
Furthermore, the decision by OPEC+ to halt production increases is worth noting, although there are speculations that Saudi Arabia might shift its focus from maintaining oil prices at $100 per barrel to regaining market share. In the realm of U.S. politics, a potential Trump presidency could result in heightened tensions with Iran and support for Israel’s actions. Conversely, a Trump administration might also lead to an increase in drilling activities. As for Vice President candidate Harris, while she has expressed openness to drilling, the prevailing perception is that such actions are unlikely to materialize.
From a technical standpoint, the recent price decline has brought the market to a crucial support zone ranging from $66.76 to $67.69. This area is expected to serve as a point of pause or potential rebound, with stop-loss orders likely to be triggered if prices break below this level.
Looking ahead, market participants will closely monitor developments in the geopolitical landscape, including any escalation of tensions in the Middle East. Moreover, factors such as global oil demand, production levels, and political decisions will continue to influence crude oil prices in the coming days. Investors are advised to stay informed and exercise caution amid the ongoing volatility in the oil market.
