Surprisingly Oil prices Friday settled right where it opened after a brief peek above 91.51, six months high, over the Iranian threat of an attack on Israel, later “Operation True Promise”. We note that oil has largely been buoyed by global conflicts and attempts to constrain supply by OPEC, even as demand remains tepid amidst China’s economic difficulties and with growing US output.
Resistance
- 91.51/58 – Strong: New Swing Highs
- 90.95 – Minor: consolidation resistance
- 90.40 – Minor: consolidation resistance
Support
- 89.13 – Minor: consolidation floor
- 88.83 – Minor: consolidation floor
- 88.39 – Moderate: Range Floor
Dramatic footage from Iran’s air strike on Israel over the weekend opens the possibility of an upside gap for oil. We note however that POTUS Joe Biden has already informed Israel it will not participate in any counter-strike lowering the possibility of region wide conflict. Supply and Demand issues will be taking the back seat for now as we favor a buy on dips to the consolidation floor at 88.39. We would look to having buy stops above 90.40 counting on knee-jerk responses as market players start the week. Any drop below 88.39 will change our technical perspective.
