FxNews—WTI crude oil futures remained above the $66.8 critical resistance as the RSI divergence signal promised a rise in prices. This steady uptick in momentum is mainly due to increased geopolitical tensions following recent events in the Russia-Ukraine conflict.
Specifically, Ukraine reportedly used Western-supplied weapons to launch its first missile strike on a Russian border region. In response, President Putin expanded Russia’s nuclear policy to allow for a nuclear reaction even to conventional military attacks.
Iran Halts High-Grade Uranium Enrichment
However, some worries eased when the International Atomic Energy Agency (IAEA) announced that Iran agreed to halt its enrichment of uranium near weapons-grade levels. This development could help reduce tensions in the Middle East.
Moreover, media outlets reported that Hezbollah accepted a U.S. proposal for a cease-fire with Israel.
Big Jump in U.S. Oil Inventories Reported
In other news, the energy company Equinor resumed partial production at the Johan Sverdrup field, the largest oilfield in Western Europe.
Meanwhile, the American Petroleum Institute (API) released data showing that U.S. crude oil inventories increased by 4.8 million barrels last week. This rise is much larger than the expected increase of 0.8 million barrels.
Crude Oil Technical Analysis
WTI crude oil remains above $66.8 as geopolitical risks increase following Ukraine’s missile strike and changes in Russia’s nuclear stance.
As of this writing, crude oil trades at approximately 69.4, testing the October 24 low as resistance. The recent surge in Oil prices was expected because the Stochastic was in oversold territory, while the RSI signals a bullish divergence.
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Oil Prices Poised for $70.5 as Bulls Challenge Resistance
Currently, the primary resistance rests at $69.7, while the Stochastic is overbought, meaning the price could pull back. That said, the immediate support is at $68.8. From a technical perspective, the uptrend will likely resume if bulls pull and stabilize the WTI crude oil prices above the immediate resistance, the 69.7 mark.
In this scenario, prices can extend to the next resistance area at $70.5, backed by the 61.8% Fibonacci retracement level.
Bearish Scenario
On the other hand, a dip below the immediate support at $68.8 could trigger the downtrend. If this scenario unfolds, the next bearish target could be the October 2024 low at $66.8.