WTI Opens Over $2 Higher Following Raised Middle East Tensions

Crude rose moderately on Friday but remains well below $90 and is down over 8% in October to date. The USD index fell 0.2%. The atrocities in Israel and subsequent raised geopolitical tensions over the weekend are likely to create additional uncertainty for oil markets and whether the events boost prices will probably depend on if the situation escalates. Other markets are likely to watch crude’s reaction for direction.

• WTI rose 0.6% on Friday to close at $82.81/bbl and has opened up over 2.5% higher at around $85. It reached a low of $81.50 post payrolls but then rose to an intraday high of $83.28. It fell 8.8% last week. The break of the 50-day EMA is pointing to prices moving down towards $80. Initial support is at $81 and resistance at $87.71.
• Brent increased 0.5% to $84.45/bbl. A low of $83.44 was followed by a high of $84.95. It is down 8.4% on the week/month. Last week saw the 50-day EMA and short-term trendline support broken which signals scope for a deeper retracement. Initial support is at $83.84 and resistance $89.96.
• OPEC ministers on the weekend confirmed that the group had to work together in order to support the market. Saudi, UAE and Kuwait ministers all voiced support for the current strategy and that it will reinforce markets in 2023. The UAE minister also said that OPEC isn’t involved in politics in response to a question on the events in Israel.