25 Oct 2024

Crude oil has retreated to $70.00 as markets adjust to a new series of developments in Israel.

US Secretary of State Blinken is intensifying diplomatic initiatives, seeking to negotiate an agreement that benefits Harris.

Meanwhile, the US Dollar Index is finding support at 104.00 in anticipation of the US Durable Goods report.

Crude oil prices are experiencing a slight increase on Friday, despite reports suggesting that US Secretary of State Antony Blinken may facilitate discussions between Israel and Iran regarding ceasefire negotiations. The Biden administration is intensifying its efforts to negotiate a ceasefire agreement in anticipation of the upcoming US presidential election on November 5. Achieving a breakthrough in these talks would represent a significant victory for the Biden administration, the Democratic Party, and Vice President Kamala Harris's prospects for the presidency.

The US Dollar Index (DXY), which measures the value of the US dollar against six other major currencies, is stabilizing on Friday following profit-taking activities on Thursday, and in advance of the US Durable Goods report for September and the final October reading from the University of Michigan. The closing position of the DXY on this Friday is crucial, as it will influence the potential for further rallies in the index next week amid uncertainties surrounding the outcome of the US presidential election.

Oil Technical Analysis: Stepping up efforts

Crude Oil price has been unable to keep trading above the pivotal levels of $71.46 and $71.68. With falling back below those two important pivotal levels, the risk of more downside could be at hand. Should US Secretary of State Antony Blinken be able to get a ceasefire deal or get the parties at least around the table, more downsides could arise in the Crude  price. 

On the upside, the  55-day Simple Moving Average (SMA) at $71.68 remains the first level to reclaim. Next up, the hefty technical level at $75.01, with the 100-day Simple Moving Average (SMA) and a few pivotal lines, is possibly the next big hurdle ahead. 

On the downside, traders need to look much lower, at $67.12, a level that supported the price in May and June 2023. In case that level breaks, the 2024 year-to-date low emerges at $64.75 followed by $64.38, the low from 2023.