Oil prices boosted by rising geopolitical risks

Oil prices gained strength on Monday, with WTI price rising from $67.2 to $68.7 per barrel on renewed geopolitical risks. If oil prices retreat, they may encounter support near $66.9 per barrel, while resistance may be found near $70.6 per barrel.

Concerns of a broadening conflict in the Middle East have boosted oil prices in the past year. A 60-day ceasefire between Israel and Lebanon has been officially declared, putting pressure on oil prices. Israel, however, is continuing attacks in the Gaza area. 

Meanwhile, the civil wars in Syria were rekindled last week, further destabilizing the region. In a surprise offensive, Syrian rebels have captured Damascus and toppled the government. President Bashar al-Assad has been forced to flee the country and according to recent reports he has asked for Asylum in Moscow. The Syrian rebel army is currently in charge and political instability in Syria is reigniting geopolitical risks, boosting oil prices. In addition, the situation between Russia and Ukraine remains critical, with Russian President Vladimir Putin stating that Russia may use its new nuclear-capable missiles against Ukraine.

OPEC+ announced last week that it will extend its voluntary production cuts until the end of the first quarter of 2025, boosting oil prices temporarily. Oil prices have been under pressure and the cartel is limiting production in an attempt to raise oil prices. Oversupply, however, coming from non-OPEC+ countries, is putting pressure on oil prices despite OPEC’s output cuts.

Oil prices are kept in check by high central banks’ interest rates. Market odds of a December rate cut rose to 90% after the release of robust US labor data on Friday, boosting oil prices. 

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: