West Texas Intermediate for May delivery surged $1.16 to close at $66.694 per barrel on the New York Mercantile Exchange, hitting a three-year high as geopolitical risks haven been rocking oil markets. This is the first day in a long time that the direction of the crude market and the direction of the stock market have diverged.
Investors are paying attention to geopolitical risks, which has been pushing crude prices to high record last seen in 2014. Saudi Arabia, the world’s biggest oil exporter, intercepted a missile attack over the kingdom’s capital just hours after U.S. President Donald Trump warned American missiles soon may strike Syria. This tension has even made Russia-US relationship down to freezing point.
Crude price closed near Jan. 15’s high at 66.693 with an intraday price up to 67.4, but pulled back later on. Today’s opening higher than previous close suggests a strong performance and high expectation from investors. WTI is trading at $66.80 per barrel as of 12:00 p.m. in Sydney with slightly gains, already breaking through a major resistance placed by Jan. 15’s high.
Oil prices tend to keep the upside momentum, but will face an upward resistance ahead, referred by an uptrend price channel started from mid-February. A breakout of this channel will lead to a sharper rise in the future.
Chart 1: WTICOUSD Daily
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