USOil Slides as Middle East Fears Ease
USOil Analysis
Iran carried out missile and drone attack on Israel earlier in the month, in what posed another threat to the already tense situation in the Middle East. Israel has reportedly conducted counterattacks after officials vowed to respond [1], but both sides appear to downplay the matter.
Markets fears of a broader escalation subside as a result and oil prices fall. The conflicts in the region that is a crucial energy hub, have failed to disrupt traffic, at least not significantly. On the demand side, growth is expected to slow down this year according to the International Energy Agency (IEA) [2] in what would pose a headwind for prices.
USOil slides below its EMA200 that halts the recent bullish bias. This exposes the commodity to the daily Ichimoku Cloud and the ascending trend line from last year's lows. The region can provide support and weakness below it has a higher degree of difficulty. On the other hand, Middle East tension are unlikely to go away and any escalation could send prices higher. As such new 2024 highs (87.66) cannot be ruled out, but prolonged gains past that would likely need actual supply disruptions.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 22 Apr 2024 https://www.cbsnews.com/news/israel-iran-missile-strikes/ | |
| Retrieved 04 May 2024 https://www.iea.org/reports/oil-market-report-march-2024 |
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