Oil Steady Amid Middle East Supply Concerns

Fundamental Analysis

* Supply Concerns: Oil prices remained stable in early Friday trading as investors balanced supply concerns in the Middle East with indications of weakened demand. Reports indicate that over half of Libya’s oil production, approximately 700,000 barrels per day (bpd), was offline on Thursday, with exports halted at several ports due to a standoff between rival political factions. According to the consulting firm Rapidan Energy Group, Libyan production losses could escalate to between 900,000 and 1 million bpd and may persist for several weeks. Meanwhile, Iraqi supplies are expected to decrease after the country’s output exceeded its OPEC+ quota, as a source familiar with the matter informed Reuters on Thursday. Iraq plans to cut its oil production to between 3.85 million and 3.9 million bpd next month

Technical Analysis

* Technical Breakout: Crude oil price was traded higher following prior breakout above the previous resistance level 75.50. MACD which illustrate bullish momentum signal with the formation of golden cross suggest the commodity to likely extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 80.00. Conversely, a potential reversal is also to be expected and the price could head back towards 71.45 after it breach back below the support level.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, investors will be closely watching key upcoming U.S. data, particularly the Fed’s preferred measure, the Core PCE Price Index, which is set to be released later today. Additionally, the market will keep an eye on developments in the Middle East, as any significant events there could affect oil demand and supply.

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Monitoring

Stay updated on US data, Middle East development, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.