According to reports, the United States and Israel will attempt to relaunch ceasefire negotiations in Gaza, causing crude oil to drop nearly 1%. West Texas Intermediate (WTI) crude oil reached an intraday high of $72.20 before the US market opened, then gave up all gains and turned negative, ultimately closing down 0.99% at $70.22 per barrel; Brent crude closed down 0.91%, at $74.22 per barrel.

After several days of market fluctuations, crude oil has returned to the vicinity of $70. The contradictory news currently may be the reason why many investors are hesitant to act rashly, perhaps due to insufficient upward momentum.

As reported by Agence France-Presse on October 24, Israel announced on the 24th the dispatch of a delegation to Qatar for negotiations on a Gaza agreement, while Hamas expressed an open attitude towards talks on a ceasefire in Gaza, and both sides are expected to reach a consensus on the ceasefire issue. An imminent attack by Israel on Iran raises questions about whether the conflict between the two Middle Eastern military powers will be a brief exchange or a protracted tug-of-war, which will have different impacts on the crude oil market.

Advertisement

Recently, both OPEC and the International Energy Agency have downgraded their expectations for global oil demand growth this year, which has had a certain suppressive effect on crude oil prices, leading to different impacts on the crude oil market and causing investors to waver between two directions. If a substantive tension occurs in the conflict between Israel and Iran in the Middle East, the crude oil market will reach a turning point.

From a technical perspective, the market did not rise as expected yesterday but was again suppressed at the 72 level, similar to the day before, with a rapid decline to near the 70 level in the afternoon. There has been a slight rebound since the market opened today, but the rebound is significantly smaller compared to the previous two times. Currently, the Bollinger Bands are showing a horizontal trend, and it is expected that there will be no significant changes in the market before news of the negotiations between Israel and Gaza comes out, possibly maintaining a range of 70-71.

Combining the above analysis, the current crude oil market, after experiencing two rounds of bullish rallies, shows signs of insufficient upward power. News from the Middle East about Israel and Gaza negotiating a ceasefire is expected to keep crude oil in the short term within the range of 70-71. If the negotiations go smoothly, crude oil prices may fall below $69 in the short term; otherwise, they may break through $72.

The current situation in the crude oil market is somewhat perplexing. The reduction in global demand and the ongoing Middle East conflict create completely contradictory directions, making the crude oil market uncontrollable. Unless there is a strong signal from one side, it is advised not to enter the market lightly.