Oil Prices Rise on Houthi Strikes in Saudi Arabia, Supply Concerns Grow

Oil prices are being underpinned by rising tensions in the Middle East. The Houthis have stepped up their assaults on Saudi Arabia, with a reported strike hitting an administrative building at Saudi Aramco's Dhahran compound.

Though no direct loss of oil production was confirmed from the incident, the risk premium is rising as attacks could spread to energy infrastructure, pipelines or export terminals. Any confirmed halt to Saudi oil flows would push prices higher.

Going forward, developments in the Middle East will stay in focus. Improved supply expectations following a breakthrough in US-Iran talks will spark a strong selloff in crude oil. Conversely, a prolonged stalemate or renewed escalation would probably send oil prices above the $100 level.

Crude Oil Technical Analysis on the Daily Timeframe

Crude oil (CFD contract) has extended its gains to new weekly highs. If the price pulls back into the lower bound of the channel again, buyers are expected to step in with risk defined below the channel, aiming for a rally to the 110.00 resistance. Sellers will look for a break lower to enter for a drop to the 68.00 support, with 80.00 as the first target.

Crude Oil Technical Analysis on the 4-Hour Timeframe

A minor upward trendline is defining the current bullish momentum. Buyers will likely continue to lean on the trendline, with risk defined below it, to push toward the 96.77 level. Sellers will look for a break lower to extend the pullback to the lower bound of the channel, targeting a break below it.

Crude Oil Technical Analysis on the 1-Hour Timeframe

The break of the minor downward trendline that had defined the pullback on the 4-hour timeframe sparked a rally as more buyers entered, targeting the 96.77 level. If the price reaches that level, sellers are expected to step in, with risk above it, to position for a drop to the lower bound of the channel. Buyers, however, will want to see the price break higher to increase bullish bets toward the 110.00 resistance next.

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Today's US CPI report is due. Tomorrow brings the US PPI, Retail Sales, and the latest Jobless Claims figures. Still, the main focus remains on US-Iran negotiations.