Geopolitical Tensions Propel Crude Oil Prices Above $70: Market Insights and Strategies

Crude oil prices trade above $70 due to the escalation of geopolitical tension, hitting a high of $70.08 and currently trading around $70.08.

Escalating Military Actions Raise Concerns
The recent situation has worsened with Ukraine launching British Storm Shadow cruise missiles into Russia, which has increased fears of more military actions that could affect oil supply chains. Analysts are concerned about how these events might lead to greater instability in the region.

U.S. Crude Oil Inventory Update
U.S. crude oil inventories increased by 545,000 barrels for the week ending November 15, 2024, marking three weeks of rising supplies, according to the Energy Information Administration (EIA). The total inventory now stands at about 430.3 million barrels, which is 4% below the five-year average for this time of year. Gasoline inventories went up significantly by 2.05 million barrels, while crude stockpiles at the Cushing delivery hub decreased by 140,000 barrels. Following this report, West Texas Intermediate (WTI) crude was trading around $69 per barrel, and Brent crude settled below $73. These inventory changes, along with market dynamics, continue to affect oil prices and market sentiment.

Market Analysis
The US dollar index and US Treasury yields remain bullish, which is generally negative for commodities. Major resistance for crude oil is at $69.55; breaching this level could push prices up to $70.59, $71.45, or $72.60. A significant trend reversal would only occur if prices rise above $73. Near-term support is around $69.70, and if this level is broken, targets could drop to $68.70, $68.45, $67, or $66. According to the 4-hour chart indicators, the ADX is bearish, and the CCI is neutral at 50.

Trading Strategy
It may be wise to consider selling on rallies between $71.50 and $71.55, with a stop loss set at around $72.50 and a take-profit target of $67.