The price of the West Texas Intermediate has gapped an impressive 15% at the open this morning amid tensions in the Middle East following the attack on Saudi Arabia’s oil and gas facilities, which has suspended half of the kingdom’s output corresponding to 6% of global supply. The Houthi rebels in Yemen have claimed responsibility but there’s also the belief that militias in Iraq could have been the culprits. US Secretary of State Mike Pompeo has put the blame squarely on Iran, saying that there “is no evidence the attacks came from Yemen.” The market seemed to be disappointed that OPEC+ didn’t consider deepening production cuts as they gathered in Abu Dhabi, however, this is likely to be forgotten, this week, after the weekend’s attack on Saudi Arabia’s oil facilities.
After facing a continuous pressure last week, Crude oil prices surged by 15% this morning traveling from a low of $54.75 per barrel, reaching a high of $63.19 before settling near the 60 level. The price is currently trading above the $59.66 with a bullish momentum that seems to be slowing down a bit after entering the overbought zone. We will be focusing on the downside a bit as the overextended move will most probably ease down. The level to watch is the $58.8 support level.
Support: 59.28/ 58.8
Resistance: 59.99/ 60.24