Following the crude oil's breakthrough of the $70 neckline on the day before yesterday, there was a decline in crude oil prices yesterday. WTI crude oil fell back near the $70 mark before the U.S. market opened, then regained some lost ground, and ultimately closed down by 0.52%, at $70.89 per barrel; Brent crude closed down by 0.41%, at $74.90 per barrel.

After today's opening, the crude oil market gradually rose to the high levels of the day before yesterday, currently at the $71.55 mark. This back-and-forth market movement inevitably reminds one of the previous sideways trend. Will there be a sideways movement in the $71-72 range next?

In the Middle East, it is reported that Russia may help Iran to face the upcoming offensive from Israel. Previously, when Iran was wavering on whether to attack Israel, it was Russia's support that helped Israel. Russia's assistance was also expected. Hezbollah in Lebanon stated that it used new types of drones and precision missiles to attack Israel for the first time, which is also Hezbollah's response to the killing of its leader's successor. From the news, the situation in the Middle East is further heating up, which increases investors' concerns about crude oil supply and may push up oil prices.

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Considering the market's fear of future supply shortages, Citigroup has raised its price forecast for Brent crude in the fourth quarter of 2024 and the first quarter of 2025 to $120 per barrel. However, Citigroup is bearish on long-term oil prices, expecting the average oil price in 2025 to be $60 per barrel, as the popularity of electric vehicles and new energy vehicles (NEVs) increases, reducing oil demand, coupled with the potential for strong growth in oil supply from non-OPEC+ countries.

From the perspective of the market, the current market has broken through the previous sideways constraints and is currently fluctuating around $71. From the MACD line, it can be seen that both the fast and slow lines are in an upward trend, and the energy column is above the 0-axis and in an upward trend. Based on the trend line trajectory combined with the ongoing heating-up situation in the Middle East, it is expected that the market will rise in the short term, but in the long term, weak global demand may lead to a decline in crude oil prices.

Based on the above analysis, the game between Israel and Iran, two Middle Eastern military powers, is still ongoing, with the United States and Russia also involved. A substantive war could break out at any time, and crude oil supply will inevitably be affected, with the market expected to rise further. Therefore, in the short term, one can be bullish, with a profit-taking position set at $74 and a stop-loss position set at $70.5. In the long term, it is recommended to wait for substantive progress in the conflict between Israel and Iran before making a judgment.