Oil market continues upward movement on the back of steep escalation of the conflict in the Strait of Hormuz, where Iranian military vehicles attempted to block one of the British tankers. According to mass media reports, who in turn refer to the sources in the White House administration, the British Heritage tanker was sailing out of the Persian Gulf and crossing into the Strait of Hormuz when five boats of Iran’s Islamic Revolution Guards Corps attempted to block it and divert it to Iranian territorial waters. British frigate HMS Montrose shadowing the oil tanker has intruded and forced Iranian vessels to back off.
Later British Minister of Defense provided comments on this situation expressing concerns about actions of Iran and called for de-escalation of the conflict.
Market also got support from a very positive data of industry statistics form the U.S. Department of Energy. According to data of the report oil inventories for the week has decreased by 9,5 million barrels against expected decline of 3,08 million barrels.
Today beside the situation in the Strait of Hormuz investors will focus on the monthly report of OPEC, that will allow to evaluate current market conditions, demand and supply balance and development prospects.
On the chart the price easily broke resistance at 66.00, that opens new prospects for growth of the quotes. Now during development of bullish movement we can expect growth of the quotes towards the 68.80 mark. The closest support level resides at 66.00.
Resistance levels: 68.75, 68.80, 72.50;
Support levels: 66.00, 63.70, 62.50.
Main scenario: Correction towards 66.00 and resumption of upward movement.
Alternative scenario: Break of the 66.00 level and decline towards 63.70.
Positive sentiment preserves on the market, therefore for intraday trading we consider long-positions, that should be sought at the 66.00 level.