The oil benchmark surged more than 3 percent yesterday after Washington abruptly announced an end all Iran sanctions waivers by May, forcing importers like Japan and India to stop buying from Tehran. The Trump administration reimposed sanctions on Iran in November last year after unilaterally pulling out of the nuclear accord. Back then, the US had granted waivers to a few select countries. Washington, however, now wants to force Iranian oil exports to zero and so has called for a complete ban. It is worth noting that Iranian oil exports, which stood at almost 3 million barrels per day before November, have now dropped below 1 million barrels per day. With the complete ban on Iranian crude, the nation’s supplies could slide further in the near future, leading to a tighter market. Further, Iran has threatened to close the Strait of Hormuz, a key oil route, in response to the US decision to end sanctions waivers on Iranian oil imports.
Crude oil prices surged by more than 3% after breaking above the small flag represented on the chart to reach the $66 level after it was capped under the $64.7 level. The price is currently printing new 2019 highs just above the $65.95 support level. The RSI is yet to signal overbought state and the upside potential is still intact. That is why we will be focusing on the $66.69 resistance level.
Support: 65.95/ 65.44
Resistance: 66.69/ 67.72