WTI Crude Oil may extend gains on Mid-East tensions, challenge of $71.89 in play
WTI Crude Oil (XTI/USD) has been recovering from the lows on bargain-seeking – and now it has a reason to extend its advance. Thousands of pagers exploded in the hands of Hezbollah militants in Lebanon in an act associated with Israel. The move serves as an escalation in the 11-month skirmishes and risks a wider war involving Iran, which backs Hezbollah. That would risk flows of oil from the Persian Gulf.
I expect oil to remain supported, especially if the Fed conveys a confident message. That would boost stocks, and oil would be dragged higher.
WTI Crude Oil (XTI/USD) faces resistance at $71.89, which is followed by $74.39. Support is at $69.60, then $68.36 and $65.25. The broad trend remains down, but the commodity is in recovery mode.
