Oil Price Plunged As Middle East Tension Subsided

Fundamental Analysis

* Peace Talk Breakthrough?: Oil prices fell by 1% due to easing tensions in the Middle East. Israel withdrew more troops from southern Gaza and committed to new discussions for a potential ceasefire in the ongoing six-month conflict. Both Israel and Hamas sent delegations to Egypt for fresh ceasefire talks ahead of the Eid holidays, alleviating concerns over Middle East tensions that had driven oil prices up by over 4% the previous week due to fears of supply disruptions.

Technical Analysis

* Technical Breakout: Crude oil price was traded lower while currently testing near the support level 84.35. MACD which illustrate strong bearish momentum signal suggest the commodity to further extend its losses after it breaks below the level.

* Resistance and Targets: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 82.75 after the price breach below the 84.35 level. Conversely, a failure to breach below the 84.35 level would indicate a technical reversal, potentially leading the price back to the resistance level at 86.15.

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Potential Risks

However, there is still anticipation of a constrained oil supply, which has bolstered market sentiment. OPEC and its allies have reiterated their commitment to production cuts until the end of June, with Russia, the leading producer, also hinting at potential deeper cuts. Additionally, the improving economic situation in China, the top oil importer, is contributing to optimism. Investors are now closely monitoring the progress of talks between Israel and Hamas.

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Monitoring

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.