Crude oil pulled back from $64 again – which direction is next?
Crude oil closed 0.18% lower on Tuesday, trading within a relatively tight range. However, after the session, a report of a potential Israeli strike on Iran drove prices significantly higher, pushing crude to the key $64 level. Today, the market is pulling back, gaining just over 1%.
For oil markets specifically, these developments are worth monitoring:
- Israel is preparing for a possible strike on Iranian nuclear sites, while the U.S. pursues diplomacy, CNN reported Tuesday, citing U.S. officials.
- U.S. crude stockpiles rose by about 2.5 million barrels last week, defying expectations for a 1.9 million-barrel draw, after a 4.3 million-barrel build the week prior, per API.
- Crude oil prices are still moving sideways as the market reacts to conflicting signals: fears of Middle East conflict and rising crude stockpiles.
Conclusion
Crude oil rallied on news of a potential Israeli strike on Iran but is pulling back from the key $64 level today. Investors are awaiting the Crude Inventories report at 10:30 a.m. Meanwhile, conflicting news about the Middle East and rising stockpiles continue to impact the market, resulting in more sideways trading.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil contracts are pulling back after yesterday’s surge on Middle East news.
- Supply concerns continue to outweigh the positive sentiment from the U.S.-China tariff reduction agreement.
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Thank you.
Paul Rejczak,
Stock Trading Strategist
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