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Crude oil prices dipped by -0.32% to 7161 with traders cautious as they watched for potential supply disruptions amid military clashes between Israel and the Palestinian Islamist group Hamas. and WTI had surged more than $3.50 as the clashes raised fears that the conflict could spread beyond Gaza. Hamas launched the largest military assault on Israel in decades on Saturday, while Israel pounded the Gaza Strip on Tuesday with the fiercest air strikes in the 75-year history of its conflict with the Palestinians.
There is still plenty of uncertainty regarding the geopolitical ramifications of the ongoing conflict in the Middle East. The latest events in Israel don’t pose an immediate threat to the oil supply as the country produces very little . However, it is feared that tightened sanctions on Iran and subsequent disruptions to Iran’s oil supply would have more of an impact on oil markets if the conflict is protracted in duration. Goldman Sachs (NYSE:) does not see any immediate major effect on near-term oil market inventories from the attacks in Israel over the weekend. It, however, added that the attacks reduce the likelihood of normalization of the country’s relations with Saudi Arabia and the associated boost to Saudi production over time.
From a technical perspective, the market is experiencing long liquidation, with a -0.28% drop in open interest, settling at 8,871. Prices fell by -23 rupees. Key support levels for crude oil are at 7,098 and 7,036, while resistance is likely at 7,225, with the potential for prices to reach 7,290.
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