Crude oil prices held steady on Wednesday as concerns about the escalating crisis in the Middle East continued. Brent, the top benchmark, rose to $107, while the West Texas Intermediate (WTI) moved to $95. This rally may continue as Iran continues shooting tankers crossing the Strait of Hormuz.
IRGC continues to shoot ships at the Strait of Hormuz
Brent and West Texas Intermediate (WTI) held steady as investors reacted to the ongoing events in the Middle East. Iran’s IRGC has intensified its attacks on tankers crossing the Strait of Hormuz. According to the UKMTO, the IRGC struck two ships on Tuesday after hitting four a day earlier. The actual number of attacks may be higher than reported.
The ongoing attacks mean that oil flows through the Strait of Hormuz will likely remain under pressure in the coming weeks. There is also a risk that Iran will deliver an “October Surprise” by launching more attacks on key US targets to lift oil prices ahead of the midterm elections.
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Crude oil prices are also reacting to the ongoing events in Saudi Arabia, where the conflict with Houthis has continued to escalate. The two sides have continued to launch fire against each other, with Houthis targeting Saudi Arabian oil facilities. They even launched attacks against Saudi Arabia’s Aramco headquarters, the biggest oil company in the world. In a statement, the energy ministry said that the strike caused a limited fire in the complex.
Prices are also reacting to the ongoing Ukraine-Russia crisis. The two sides continued launching attacks against each other, even after President Trump announced his “energy ceasefire” between the two countries.
Taken together, all these events will have an impact on global oil supplies at a time when demand remains elevated. Inventories in the US and other countries has continued to fall this year, a trend that will accelerate as they release more oil from their reserves.
Crude oil price technical analysis
Brent crude oil price chart | Source: TradingView
The daily chart shows that Brent, the global benchmark, bottomed at $70 in July and then crawled back to a high of $109.96 in September. It then pulled back to $95 on September 30th.
Oil has remained above the ascending trendline that links the lowest levels since July 1. Most notably, it has been supported by the 50-day Exponential Moving Average (EMA), which has provided it with a strong dynamic support.
The Relative Strength Index (RSI) has also continued rising, a sign that it is gaining momentum. Therefore, the price will continue rising as bulls target the key resistance level of $109.96, its September highs. A move above that level will point to more gains towards the resistance level of $110, followed by the year-to-date high of $119.
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