Crude oil prices rose for the sixth consecutive session on Wednesday, with WTI rising marginally by 0.05 percent to stay above $80 for the third successive session. At the time of writing WTI price was at $80.73 per barrel, while Brent traded at $85.56 per barrel, having gained 0.3 percent. The latest price surge is powered by increased risk exposure in the Russia-Ukraine war, which has once again made oil infrastructure the central target.
News outlets reported that Ukraine conducted a drone strike on the Russian port of Azov, which is home to 220,000-ton capacity oil refinery. This impacted the supply-side economics of oil, with concerns that it could lead to shortage of the commodity in the market. This comes amidst expectations of increased demand for the commodity in the summer. However, the markets will have to wait a day longer for the release of official US crude oil inventories data on Thursday, as the Juneteenth holiday fell on Wednesday. The previous two readings released in June showed a rise in the stockpiles, and a third consecutive rise could dent the positive demand outlook.
Crude oil prices could also get fresh momentum from the geopolitical pressure rising in the Middle East. Israel and militant group Hezbola. On Tuesday, Israel’s Foreign Minister Israel Katz warned that Israel was prepared for an “all-out-war” against Lebanon-based Hezbollah after the group posted a drone footage of Israel’s Port of Haifa, with implied threat of attacks against the city. An escalation of the war rhetoric will almost certainly spike oil prices.
Technical analysis
Brent crude oil prices are likely to continue with the upside if the buyers keep the price above $85.64. That could see the first resistance encountered at $85.80, beyond which the momentum could push the price to $86.00. On the other hand, if the price breaks below $85.64, the sellers will likely take control, and the first support could come at $85.49. A continuation of control by the sellers will break the support, and will invalidate the upside view. Furthermore, it could result in a stronger downside momentum to test $85.33.
