Expert Analysis: Geopolitical tensions in the Middle East are driving oil prices higher, with fears of potential supply disruptions pushing prices to new heights. The possibility of an Israeli attack on Iranian oil facilities has investors on edge, with predictions of prices hitting $90 or even $100 per barrel if Iranian exports are disrupted.
Despite increased Libyan oil production, prices continue to climb, indicating market sensitivity to potential disruptions. The recent escalation in the Middle East conflict has only added to the uncertainty, with concerns over Israeli retaliation and calls for strikes on Iranian oil facilities.
The potential consequences of such actions are severe, with fears of a global spike in oil prices and possible blockades of vital waterways like the Strait of Hormuz. US President Joe Biden has reportedly been working to prevent an Israeli attack on Iranian infrastructure, highlighting the significant impact such events could have on the global economy.
While Libya has resumed oil production, the market remains focused on the Middle East tensions. Analysts predict Brent could reach $90 if Iranian exports are disrupted, with the potential for prices to hit $100 per barrel depending on the scale of any future attacks.
Technical Analysis: Oil prices are on the rise, breaking above long-term trendlines and approaching key resistance levels around $80 a barrel. The recent rally, fueled by geopolitical concerns, has seen prices pause at the 100-day MA level, with potential for further gains if the conflict escalates.
Support and resistance levels are key indicators to watch, with immediate resistance at 80.180 and possible areas of confluence around 81.90. A pullback could find support at 79.00 and 76.35, with the potential for further volatility depending on news from the Middle East.
Overall, the current market dynamics are driven by geopolitical tensions in the Middle East, with the potential for supply disruptions and escalating conflict pushing oil prices higher. Investors should closely monitor developments in the region and be prepared for increased volatility in the coming days.
Source: LSEG, Reuters, Bloomberg