Crude Oil fails to hold above $71.00 with possible ceasefire talks at hand

• Crude Oil dips back to $70.00 as markets price in a fresh string of events in Israel.
• US Secretary of State Blinken’s diplomatic efforts could result in ceasefire talks. 
• The US Dollar Index finds support at 104.00 ahead of US Durable Goods. 

Crude Oil price consolidates on Friday on headlines that US Secretary of State Antony Blinken might be able to get both Israel and Iran at the table for ceasefire talks. The Biden administration is stepping up efforts to broker a ceasefire deal in light of the US presidential election on November 5. A breakthrough would be a win for the Biden administration, for the Democrats, and for Kamala Harris’s chances of becoming President. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, is consolidating on Friday after profit taking on Thursday and ahead of the US Durable Goods data for September and the University of Michigan final October reading. It is important where the DXY closes this Friday, as it will determine if the DXY can rally further next week on the back of uncertainty on the US presidential election outcome. 

At the time of writing, Crude Oil (WTI) trades at $70.48 and Brent Crude at $74.42

Oil news and market movers: Growth outlook bearish

• The International Energy Agency (IEA) has warned that global demand growth would continue to weaken due to China’s slowdown and uptake of electric vehicles, Bloomberg reports.
• Next week, all eyes will be on the OIl companies like BP, Shell, Chevron, and ExxonMobil. They will report Q3 earnings during the week. Other big firms due to report include PetroChina, Sinopec, and TotalEnergies, Reuters reports.
• Eni sold a shipment of CPC Blend to ExxonMobil on the Platts window. This year has been tough for Oil refining, according to Neste’s Chief Executive Officer, Reuters reports. 

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 Oil 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.

US WTI Crude Oil: Daily Chart