WTI & Brent Crude Surge 4% Owing To Geopolitical Tensions Iran, FxWirePro’s Long Hedges On Track To Arrest Triple Bottom Risks

The commodity markets are making abuzz, including energy commodities, precious metals that have surged to a fresh highs in the New-Year on the back of the U.S. airstrike killed one of Iran’s commando in chief, Qassem Soleimani, who happened to be a senior Iranian influential military official, the news bolstered the apprehensions in the Middle East region. Qassem headed militias that fortified Iran’s power, is shot dead in a drone attack in Baghdad authorized by Trump, the Defence Department reported late Thursday. 

As a result, almost entire commodity markets have surged in green including crude. WTI and Brent rose by 4% each within a spur of the moment. While the price surge in the precious metal segment has also been exuberant, with Gold (XAUUSD) spiked higher more than 1.30% to $1,550.38 an ounce. While the silver prices have also risen about 1.3%, the Platinum and Palladium are no exception, they also have advanced.

The global crude oil prices have regained buying sentiments of-late, with Brent and WTI crude futures seem to have been staged for 5th consecutive week’s gains after the recent lows of $56.17 levels, it has risen from $44.37 (2019 lows) to the recent highs of $64.05 level (surged 35.13% in the last year), and with the 2019 lows of 55.90 levels Brent crude has rallied about 21.90% and continued the bullish streaks.

Technically, we emphasized on WTI crude price consolidation that seemed robust in our previous write-up upon triple bottom formation with bottom 1 at $50.63, bottom 2 at $50.55 and bottom 3 at $51.03 levels.

While hammer candle at $52.27 level to propel upswings above DMAs with bullish crossover, and leading oscillators to substantiate. 

Both RSI and Stochastic curves show upward convergence to the prevailing price upswings to indicate the strength and intensified buying momentum. Major hurdle for both Brent and WTI prices would be 100-EMAs for further uptrend continuation, it may probably require further breakthrough in US-China trade talks to move the oil market higher.

Fundamentally, a report by OPEC also indicated that production outside of the cartel may decline in 2020, particularly within the US shale basins, which added further bullishness to the energy commodity market. Hence, we advocated derivatives trades on crude oil when spot reference: $61.90 levels, we wish to continue them on hedging grounds as we could foresee further upside risks amid some overbought sentiments. 

The strategy reads this way: Maintain longs in CME WTI futures of January’2020 month deliveries, currently, WTI is trading at $63.38 while articulating.