The rollercoaster ride continues as we see oil prices rise again to start the new week today. This comes amid escalating tensions in the Middle East, as Iran and Israel have engaged in military exchanges since the weekend. The missile strikes are continuing as of this morning, and Iran is not shy about blaming the United States for all of this.
Although US President Trump once again confirmed that the agreement is “very close,” the reality of the situation is different.
As things go this week, we are no closer to agreement than we were last week and even the week before. As a reminder, the talk of the town two weeks ago was that a deal was “imminent.” However, here we are now.
With the ceasefire being violated and the US/Israel continuing to cross one of Iran’s major red lines, it certainly does not look like a framework agreement is in the offing. As such, we are seeing oil prices rise again to start the week.
Daily chart of WTI crude oil ($/barrel)
WTI rose 4.5% to $94.60 and is recovering from the decline seen in the second half of last week.
The chart displays an interesting technical situation with the narrow flag/wedge pattern now developing. As tensions begin to rise again, price action in oil suggests that a technical breakout may soon follow. And if accompanied by the right headlines, it could be news that sees prices actually moving in one direction after much pushing and pulling in recent weeks.
So, make sure to keep an eye on the headlines but also be wary of the technical development taking shape above.
