Oil climbs $3 with eyes on the Middle East and China

October 10, 2024 at 06:43PM
Chinese markets improved today after Beijing’s finance minister teased a Saturday briefing on potential economic measures. That’s helped to boost global growth trades including oil but if you look around markets, the other things correlated to growth aren’t nearly a strong as oil. Brent crude is up $3 to $79.60 in a strong rebound after two days of selling.

That leads me to believe the market is focusing on the Middle East and the potential for Israeli strikes in Iran today before shabat starts on Friday. Yesterday Biden and Netanyahu held a phone call and today Israel’s security council met.

My strong suspicion is that the reality of the strikes won’t rise to the level of the fears as many of Israel’s allies are urging it not to strike energy infrastructure and instead focus on military targets. That said, war is a dangerous game and political moves are tough to predict.

Technically, the retest of the September high (old resistance) this week is a good sign for the bulls but a rise above $81 is needed to clear the way. It’s been a volatile market but I could envision $4-5 moves on an Israel strike even if oil infrastructure isn’t hit.

This article was written by Adam Button at www.forexlive.com.