Crude oil prices surged higher on Thursday erasing the gains from the day before. The reversal in oil prices came on the news about two oil tankers that were attacked in the Gulf of Oman. The news quickly stoked fears of escalating tensions between Iran and the US. Cost of shipping and insurance premiums are also expected to rise, adding to the price surge. By Thursday’s close, however, oil prices retreated off the intraday highs.
Will WTI Reverse Direction?
The rebound in oil prices coincided with the test of the support area at 51.70. The rebound was however short lived. Price is seen retreating earlier today. Thus, a retest of the support area is quite likely. As long as WTI crude oil remains above the 51.70 handle, we expect to see some upside in price. But in the event of a break down below 51.70, then oil prices could be on track to test the $50.00 psychological support.
