Oil prices are easing on Monday after markets scale back the risk premium in Oil that got priced in ahead of the weekend. With investors applauding the deescalation, a test towards $83.34 (purple line) is key. In case that line snaps, expect to see further falls towards $80 as more risk premium is priced out.
In case tensions escalate again and last week’s high at $87.12 gets broken, the $90 handle should come into grasp. One small barrier in the way is $89.64, the peak from October 20. In case of further escalating tensions in the Middle East, expect even $94 to become a possibility, and a fresh 18-month high could be on the cards.
On the downside, $83.34 is the first level to have a look for after a very clean break and test for support on April 1 and 2. Should it not hold, $80.63 is the next best candidate as a pivotal supportive level. A touch softer, the convergence with the 55-day and the 200-day Simple Moving Averages (SMAs) at $79.32 should halt any further downturn
Oil news and market movers: Sigh of relief
Goldman Sachs Analyst Daan Struyven said to Bloomberg that a $5 to $10 risk premium should be added into the Oil prices when the Israel-Iran situation further escalates.
Iran has already come out on Monday morning to say it is not looking for further escalation of tensions in the Middle East.
Overall risk on sentiment rolls through markets after tensions in the Middle East are easing.
Upside risk to Oil prices remain in the coming weeks in case of any Oil embargoes against Iran as the country is the third-largest producer within OPEC.
Oil Technical Analysis: Easing for now with tail risk in mind
Oil prices are easing on Monday after markets scale back the risk premium in Oil that got priced in ahead of the weekend. With investors applauding the deescalation, a test towards $83.34 (purple line) is key. In case that line snaps, expect to see further falls towards $80 as more risk premium is priced out.
In case tensions escalate again and last week’s high at $87.12 gets broken, the $90 handle should come into grasp. One small barrier in the way is $89.64, the peak from October 20. In case of further escalating tensions in the Middle East, expect even $94 to become a possibility, and a fresh 18-month high could be on the cards.
On the downside, $83.34 is the first level to have a look for after a very clean break and test for support on April 1 and 2. Should it not hold, $80.63 is the next best candidate as a pivotal supportive level. A touch softer, the convergence with the 55-day and the 200-day Simple Moving Averages (SMAs) at $79.32 should halt any further downturn
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