Crude Holds Onto Most Of Week’s Gains, Uncertainty High

Oil prices fell moderately on Tuesday after soaring over 4% following the atrocities on the weekend which raised tensions in the Middle East. Crude may have been supported by news that China could increase its budget deficit to boost growth. Prices fell 0.5% to be up around 3.8% since Friday. The USD index fell 0.3% on lower yields.

• WTI fell 0.5% to close at $85.97/bbl. It reached an intraday high of $86.74 during European trading but then fell to a low of $85.12. Technicals still imply that oil is in a bear cycle. Support is at $81, August 31 low, and resistance at $87.71, 20-day EMA.
• Brent also is 0.5% lower at $87.76/bbl after a high of $88.49 which was followed by a low of $86.91. Support is at $83.84, October 5 low, and resistance at $89.96, 20-day EMA.
• Bloomberg is reporting that the US and Venezuela are close to a deal to ease some sanctions if impartial elections are held. Oil and banking would be two areas that the US would ease some sanctions on.
• A deal with Venezuela may become more important to the US now that easing tensions with Iran seems off the table. The fighting between Israel and Hamas is being watched closely for any expansion into Iran, who supports Hamas.
• On Monday, there was the largest switch into bullish call options seen since Russia’s invasion of Ukraine, according to Bloomberg.