Crude Oil Market Analysis:

WTI crude oil prices have climbed back above $70 per barrel in early Asian trade on Tuesday, October 22nd, currently trading around $70.24.  While the upcoming US election and the need for a technical correction following last week's sharp losses are weighing on sentiment, escalating geopolitical tensions in the Middle East are fueling concerns about potential supply disruptions, supporting an oversold bounce in oil prices.

Brent crude futures rose $1.23, or 1.68%, to settle at $74.29 a barrel on Friday. US crude futures settled at $70.56 a barrel, up $1.34, or 1.94%.

While US-led efforts to broker a ceasefire in Gaza have so far failed, the conflict has escalated further. Israel is now targeting not only Hezbollah but also warning of direct retaliatory strikes against Iran, raising the risk of a wider regional conflict.  In an attempt to de-escalate tensions, US Secretary of State Antony Blinken embarked on another trip to the Middle East on October 21st to try to restart negotiations to end the Gaza war. This is Blinken's eleventh visit to the region since the conflict began.  

Geopolitical developments will remain a key focus for oil markets.

Crude Oil Technical Analysis:

Daily Chart:The daily chart shows that oil prices have been oscillating around the moving averages, indicating a range-bound market in the medium term, with the range between $70.80 and $65.50.  Prices are currently near the lower end of this range.  Last week's price action was predominantly bearish, with prices testing the lower boundary of the range. This range-bound trading is expected to persist for some time.

4-Hour Chart:The 4-hour chart shows that oil prices have crossed above the moving averages, suggesting a shift towards a range-bound market in the short term.  The recent price action highlights the volatile nature of oil markets. Prices are currently consolidating near the upper boundary of the range. The short-term outlook remains within a broad downward channel, with the upper boundary of this channel acting as resistance.  A scenario of prices rising initially before resuming their decline is likely.

Overall:The short-term outlook for oil favors selling on rallies with selective buying on dips.

Key Resistance Levels: $71.2 - $71.7

Key Support Levels: $69.0 - $68.5

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