Crude prices were mixed this morning, but mostly going sideways. Despite the underlying geopolitical risks tied to the Middle East conflict, the market has struggled to sustain upside momentum.
Since prices surged last Thursday, crude has been relatively rangebound, albeit in a wide one, with front-month WTI flitting between $75 and $70. Since Tuesday, the range has been even tighter, as WTI spent most of the time stuck between $72 and $74.
The daily MACD continues to indicate that oil is very overbought. Yet there’s no reason why it can’t stay overbought for a significant period, given the reason for its spike up last week. In fact, the recent consolidation has seen the MACD flatten out to some degree.
Source: TradingView
Oil traders remain headline-sensitive, with any escalation in hostilities between Israel and Iran, together with the threat of US involvement, likely to spark fresh volatility. But the market is calmer now.
This reflects comments from President Trump which appear to favour a return to the negotiating table with Tehran. This has helped to dampen fears that the US was preparing to engage directly and join Israel in taking out more of Iran’s nuclear facilities.
