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Crude Oil Outlook: UAE Attack Drives WTI, Brent to 7-Year High

Crude Oil Outlook: UAE Attack Drives WTI, Brent to 7-Year High

Tammy Da Costa, Analyst

Crude Oil, WTI, Brent – Talking Points

  • Crude oil prices climb to a highest level since 2014
  • UAE (United Arab Emirates) attack adds to supply concerns
  • Will geopolitical tensions between Russia and Ukraine hinder the ability for OPEC+ to increase supply?

Attack on UAE Adds to Geopolitical Risks, Oil Rallies

Oil prices have reached the highest level since 2014 after the Yehmen Houti group used drones and missiles to set off explosions in fuel trucks in the UAE (United Arab Emirates).

With already rising geopolitical tensions between Russia and the Ukraine, the recent attack on the third largest oil producer raised concerns that further supply constraints could add additional pressure on already elevated energy prices.

As long as these concerns remain, oil prices will likely remain on an upward trajectory, exacerbating fears of rising costs of living.

Oil – US Crude (WTI) Price Action

Earlier today, WTI crude temporarily breached the October 2021 high of $85.36, setting a new seven year high of $85.73.

With price action currently trading comfortably within an ascending channel and above the 50-day moving average (SMA), a break of $86.00 may provide bulls to drive prices higher.

If buying pressure persists, the next big level of resistance rests at $91, the 61.8% Fibonacci of the 2008 – 2020 move. However, the recent rally has pushed the CCI (commodity channel index) into overbought territory which may potentially result in a decline in bullish momentum.

US Crude (WTI Crude) Daily Chart

Crude Oil Outlook: UAE Attack Drives WTI, Brent to 7-Year High

Chart prepared by Tammy Da Costa using TradingView

Similarly, Brent Crude temporarily breached $88.00 before settling above the key psychological level of $87.00. If prices are able to break through $90.00, a push above channel resistance could see bulls aiming for $97.30, the 61.8% retracement of the above-mentioned move.

UK Oil (Brent Crude) Daily Chart

Crude Oil Outlook: UAE Attack Drives WTI, Brent to 7-Year High

Chart prepared by Tammy Da Costa using TradingView

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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