Oil Prices Back Up, Filling the Weekend Bearish Gap

Last night, the crude oil price opened with a $1 bearish gap and fell for another $1 to bottom at $84.70/barrel when Israel withdrew its military presence in Gaza, but it has since reversed back up again as the attacks are reportedly to continue. Now the gap has been filled so buyers are back in charge.

WTI Oil Chart H4 –  Back Above MAs

Developments in Gaza

We saw further retreat early as Middle East tensions subsided following Israel’s decision to withdraw additional troops from southern Gaza and to hold new negotiations on a possible six-month ceasefire. Israel promised US diplomats that there wouldn’t be a significant military operation in Rafah prior to their meeting.

Subsequent reports, nevertheless, claimed that Israeli Prime Minister Benjamin Netanyahu had declared that a date had been determined for the Rafah assault of Gaza. Then, the White House declared that it was not informed about the date of Israel’s attack of Rafah. It goes without saying that things are still quite unstable, and this affects how much crude oil costs on a daily basis.

Iraq to Start Exporting Oil to Turkey

Iraq has completed the initial phase of repairing the pipeline used to export oil to Turkey, with operations expected to resume by the end of April. The pipeline is set to export 350,000 barrels per day from the oilfields in northern Iraq. Despite this development, there was only a slight bearish response in oil prices following the announcement, which ended pretty fast, with Oil reversing higher.

Now there is a bullish sentiment in Crude Oil, with expectations of continued upward pressure and momentum in the Oil market. The recent recovery from lows below $85 in WTI is seen as a significant development, potentially paving the way for further gains. From a technical analysis perspective, the removal of a significant obstacle suggests a possible move towards recent highs, such as $87.60, and even potentially reaching $90. The market’s behavior indicates that short-term declines are being met with buying interest, indicating a strong underlying bullish trend.

US WTI Crude Oil Live Chart