China's policies, Middle East developments support oilWest Texas Intermediate TVC:USOIL reached over 72 USD/barrel supported by the Chinese Government's lightning-fast policy support for the economy and the situation in the Middle East is very tense. All of these geopolitical factors are driving oil prices even higher.
In addition, natural conditions also threaten supply from the US, the world's largest crude oil producer, pushing oil prices up.
China's massive stimulus policy
Pan Gongsheng, Governor of the People's Bank of China, announced a series of stimulus measures at a press conference in Beijing today (Tuesday), a clear sign of the broadest effort yet by the Policymakers aim to achieve an annual growth target of around 5% this year. This is the largest stimulus measure since the outbreak of the Covid-19 epidemic.
The measures announced today include: boosting bank lending to consumers and businesses and cutting the People's Bank of China's key short-term interest rate, which will support growth and energy demand in the world's largest oil importer.
New developments in the Middle East
Hezbollah strongholds in Lebanon on Monday, Lebanese authorities said air strikes killed 492 people and forced tens of thousands to flee their homes.
Oil prices are supported by geopolitical conflicts because this region (Lebanon) plays an important role in oil production.
The attack risks bringing OPEC oil producer Iran, which backs Hezbollah, closer to a conflict with Israel and could trigger a wider war in the Middle East region, which in turn could continues to push for support for crude oil as supply is threatened. In particular, this conflict could completely involve Iran, a major member of OPEC, and could further disrupt crude oil supplies from the Middle East.
Technical outlook analysis of TVC:USOIL
On the daily chart, WTI crude oil is showing the initial conditions for a bull run with the RSI steeply upward sloping past 50, along with price activity moving upwards. the 21-day moving average which acted as resistance previously.
However, WTI crude oil will need to temporarily break the 72.65 USD level to fully confirm the technical conditions for a bullish cycle with a short-term target level of around 74.39 USD.
In the short term, the trend of WTI crude oil is more inclined towards price increases with notable positions listed as follows.
Support: 70.90 – 70.49 – 69.37USD
Resistance: 72.65 – 74.39USD
