Crude Oil edges up, in second consecutive attempt to overcome $70

• Crude Oil edges higher as Russia responds to Ukraine’s missile attacks by launching an intercontinental ballistic missile for the first time in the war.  
• The Russian missile attack targeted critical infrastructure in the city of Dnipro.
• The US Dollar Index is being fueled by safe-haven inflows, though it faces resistance.

Crude Oil prices are trying to break above $70 for a second consecutive day, fueled by headlines that Russia has launched a ballistic missile into Ukraine for the first time in the war, Bloomberg reports. On Wednesday, Oil already tried to overcome the round $70 level, but failed to do so after headlines emerged that both Ukraine and Russia are willing to hold talks to resolve the current stalemate situation. Any headlines pointing to this possibility could trigger a knee-jerk reaction for Oil prices. 

Meanwhile, the US Dollar Index (DXY) is flat, supported by safe-haven inflows on the back the war between Ukraine and Russia. On the other hand, New York Fed President John Williams delivered dovish comments,  saying that inflation is set to decline further and interest rates should head lower as well. All this together, coupled with disappointing Nvidia earnings overnight, sees the DXY US Dollar Index not really going anywhere. 

At the time of writing, Crude Oil (WTI) trades at $69.48 and Brent Crude at $73.25.

Oil news and market movers: Biden makes his last moves

• Although Oil prices are rising, the options markets are not showing any concerns for the near future, which could mean that a further escalation is not foreseen. 
• The Biden administration has recognized opposition candidate Edmundo González as Venezuela’s president-elect, a move that may make it harder for the incoming Trump administration to cut a deal with Nicolás Maduro, Bloomberg reports. Venezuela is a key producer of Oil in Latin America and it has the world’s largest Oil reserves.
• US inventories of crude Oil rose for the third straight week as a rebound in Oil exports offset a massive inflow of imported supplies into the Gulf Coast, the weekly report from the Energy Information Administration (EIA) revealed on Wednesday.

Oil Technical Analysis: Limited potential forecasted

Crude Oil price might be ticking up, supported by the geopolitical tensions between Russia and Ukraine. Still, markets seem to be taking these moves with a pinch of salt as the actual Oil market is still very much flooded with more supply than demand. So, the overall longer term outlook has not changed. 

On the upside, the 55-day Simple Moving Average (SMA) at $70.08 is the first barrier to consider before the 100-day SMA steps in at $72.89. The 200-day SMA at $76.48 is still quite far off, although it could be tested if tensions intensify further. 

On the other side, traders need to look towards $67.12 – a level that held the price in May and June 2023 – to find the first support. In case that 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