Crude Oil Prices Rise as Ukraine Conflict Intensifies

Fundamental Analysis

* Surging Conflict: Crude oil prices, traded in dollars, surged to a two-week high as the escalating war in Ukraine heightened the market’s geopolitical risk premium. The conflict intensified after Britain and the U.S. authorized Kyiv to carry out deeper strikes into Russian territory using their missiles. In response, President Vladimir Putin announced Russia would continue testing its new Oreshnik hypersonic missile in combat, with a ready stockpile for deployment. Russia launched the missile into Ukraine, following Ukraine’s use of U.S. ballistic missiles and British cruise missiles against Russia. Market concerns have risen over potential accidental damage to oil, gas, or refining infrastructure, which could result in long-term disruptions and amplify the war’s intensity, further influencing oil prices.

Technical Analysis

* Technical Breakout: Crude oil price was traded higher while currently testing near the resistance level 71.75. MACD which illustrate persistent bullish momentum signal suggest the commodity to likely further extend its gains after it breaks above the level.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially rebound towards the level 75.90 after it breach above the level 71.75. Conversely, a potential reversal is also to be expected and the price could head back towards 66.95.

Potential Risks

Looking ahead, investors will turn their attention to this week’s U.S. data releases, including CB Consumer Confidence, GDP, and the Core PCE Price Index, which could impact commodities priced in U.S. dollars. Additionally, markets will closely follow developments in the Middle East and the Russia-Ukraine conflict, as these events could potentially disrupt crude oil supply.

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Monitoring

Stay updated on US data, global conflict updates, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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