Middle East Tensions Spark Oil Price Rebound
The weekend attacks in the Middle East erased Friday's crude oil selloff, as prices rebounded sharply on Monday. The rally came after Omani Foreign Minister Badr Albusaidi confirmed that a meeting between Iran and Gulf countries was off, killing the trade that had sparked the selling on Friday.
The Financial Times reported a temporary shipping agreement with Iran was in the works on Friday, leading traders to strip risk premium ahead of the weekend. However, this news was short-lived as Albusaidi revealed that the meeting between Iran and Gulf countries is off, with no talks producing a working agreement since an interim deal collapsed in June.
The attack on Saudi state media showed damage to homes and a mosque in Jazan province Sunday, while the Houthis struck a Saudi military base in a neighboring province and reached the strategic island of Perim near the Bab el-Mandeb Strait on Friday. A vessel was also hit by a projectile in the Strait of Hormuz, starting a fire and forcing the crew to evacuate.
The bias remains bullish for both contracts, with the main trends up on the daily swing charts. However, traders are cautious as downside targets have been set at $98.48 on WTI and $103.50 on Brent, which would confirm the pattern and flip momentum toward the retracement zones at $96.59 and $92.04 on WTI, $101.56 and $97.27 on Brent.