Crude Oil Price Rise to $77.50 Amid US Dollar Strength and Middle East Tensions

Despite a strengthening US dollar, WTI crude oil prices have managed to maintain a bullish stance, hovering around the $77.00 mark. The primary driver behind the price increase has been escalating geopolitical tensions in the Middle East, threatening potential supply disruptions and contributing significantly to crude oil’s upward trajectory.

Recent developments include a marked increase in tension following Israeli actions in Rafah, resulting in 67 Palestinian casualties. Additionally, the situation intensified with Yemen’s Houthi rebels targeting a vessel en route to an Iranian port with missiles.

Escalating Middle East Conflicts and Their Impact on Crude Oil

The situation in the Middle East continues to deteriorate, largely due to the ongoing conflict between Israel and Hamas. Despite attempts at initiating peace talks, violence has escalated, leading to substantial losses on both sides.

Notably, Israeli offensives in Rafah have claimed over 67 Palestinian lives, prompting the UN to issue warnings about severe food insecurity and impending famine conditions in Gaza.

Since October 7, Israeli assaults have resulted in over 28,000 Palestinian deaths and nearly 68,000 injuries. On the Israeli side, Hamas’s attacks since the same date have led to 1,139 fatalities. The rising tensions significantly threaten crude oil supply chains, potentially driving higher prices.

Economic Indicators and Their Influence on Crude Oil Pricing

On the economic front, the Federal Reserve’s decision to maintain high-interest rates amidst inflation concerns has bolstered the US dollar, putting a cap on further crude oil price increases.

The Fed’s warnings about prolonged elevated rates due to sustained inflation could negatively impact oil demand. The strength of the US dollar and diminished prospects for interest rate cuts this year further influence crude oil markets.

Upcoming CPI data for January is anticipated to reveal a reduction in inflation, albeit above the Fed’s 2% target, suggesting that interest rate cuts may not be imminent.

WTI Crude Oil Price Forecast: Technical Outlook

On February 13, USOIL saw an uptick, closing at $77.53—a 0.84% increase. This movement positions the commodity above its pivot point of $76.86, hinting at a potential uptrend.

Key resistance levels are identified at $78.30, $79.27, and $80.36, with immediate support at $75.52, followed by $74.22 and $72.56.

The 50-day and 200-day Exponential Moving Averages (EMAs) further define the technical landscape at $75.49 and $74.63, respectively, underscoring a bullish momentum.