Crude oil market retains upward movement vector on the back of tensed situation around Iran and positive news concerning trade talks between USA and China.
On Sunday the 60-days ultimatum given by Iran to European signatories of the Joint Comprehensive Plan of Action (JCPOA) has expired. Since countries of the EU couldn’t arrange the measures to offset economic impact of american sanctions, Tehran has officially announced resumption of uranium enrichment program. Washington responded to these claims with threat of new sanctions, that will ensure Iran’s complete isolation from the outside world. Analysts are concerned, that further escalation of this conflict can lead to disruptions in oil supply from the Middle East region, that provides support to oil prices. Yesterday the White House adviser Larry Kudlow has officially confirmed the information about meeting scheduled for this week of the American and Chinese high officials, where the parties will discuss details of further trade negotiations.
On the chart, after forming of strong local support at the 62.50 level, an upward wave continues to develop having the local target at the 65.00 level. At the same time in medium-term outlook we can’t rule out a possibility of the quotes’ growth towards 66.00. Therefore the main scenario is still bullish.
Resistance levels: 65.00, 66.00, 68.80;
Support levels: 63.60, 62.50, 61.00.
Main scenario: Growth towards 65.00.
Alternative scenario: Break of support at 63.60 and decline towards 62.50.