The oil price was back at $80 per barrel but faces a cluster of resistance.
USOIL – Daily Chart
The price of oil now trades at $79.22 per barrel but should get to $80 this week, where resistance formed three times from November. A breakout above could see a sustained rally to $85 and then $90.
Middle East uncertainty has not led to further instability but still adds a floor under oil for now. However, demand uncertainty has caused traders to add caution.
The economic outlook in the US has been mixed for oil, with the Commerce Department report showing retail sales dropped 0.8% in January, the most significant fall since February 2023. However, interest rate cuts could lead to a dollar decline and boost overseas crude sales.
“Hopes for US rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long weekend in the US,” said Hiroyuki Kikukawa at Nissan Securities.
“While keeping a close eye on interest rate trends, investors will continue to assess whether geopolitical risks in the Middle East will spill over into crude supply chains,” he said, adding that US oil should trade in the $70-$80 range for a while.
That will make the next two weeks important in oil to see if it can break above the critical $80 level and start a March higher.
