Crude Oil sell-off eases amid political calls in Israel to strike Iranian Oil fields

• The recent sell-off in Crude Oil halts, but losses are still of more than 6% this week so far. 
• Oil remains supported as markets see harsh rhetoric from Israel’s opposition party to bomb Iranian Oil fields. 
• The US Dollar Index has pushed through strong resistance on its way to 104.00.

Crude Oil sees its sell-off stall on Wednesday on the back of harsh rhetoric from Israel’s opposition party. The comments were published in the Jerusalem Post on Tuesday and came from the Yest Atid Party head, Yair Lapid, who called for an immediate attack on Iranian Oil fields. Such an attack would defy the request from the US administration not to do so, contributing to the escalatory spiral between the two countries and increasing the potential of a wider conflict. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, advances to a fresh two-month high to levels not seen since August this year. The additional surge in the Greenback came after former US President Donald Trump interview on Bloomberg, in which he further outlined his economic plans if he were to become President again. Traders are placing more bets on the assumption Trump will win on November 5. 

At the time of writing, Crude Oil (WTI) trades at $69.70 and Brent Crude at $73.66.

Oil news and market movers: Libya lifts its export schedule 

• Libyan crude oil is expected to accelerate its production and export schedule for October to 27.52m bbl per month or 888k barrels per day, according to a loading program seen by Bloomberg News. 
• Crude Oil prices are little changed in European trading on Wednesday amid uncertainty about the future of the Middle East conflict and the effects of output cuts being held in place by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers until December, Reuters reports.
• The weekly Crude Oil Stockpile Change numbers from the American Petroleum Institute will be released at 20:30 GMT. Expectations are for a build of 2.3 million barrels, smaller than the 10.9 million build registered a week earlier.  

Oil Technical Analysis: Fragile at $70.00

Crude Oil is trying to hold the $70.00 marker, but it will not be an easy task. With OPEC set to open up the Oil tap soon and supply remaining sluggish, not much upside potential is present. The geopolitical tensions seem to be abating a bit but remain high, not helping out either, so traders are looking for a steady fair value for Oil, which could be further down below $70.00.

There is a challenging path to recovery for Crude Oil. First, the pivotal level at $71.46, which was strong enough to catch the falling knife on Monday, must be regained again with a daily close above it. Once from there, the hefty technical level at $75.35, with the 100-day Simple Moving Average (SMA) and a few pivotal lines, is possibly the first big hurdle ahead. 

On the downside, that previously mentioned $71.46 pivotal level has now turned into resistance and no longer has any value as support. Instead, traders need to look much lower, at $67.11, a level that supported the price in May-June 2023. In case that level breaks, the 2024 year-to-date low emerges at $64.75 followed by $64.38, the low of 2023.

US WTI Crude Oil: Daily Chart