Key Trading Levels On Oil After Middle East Triggered Pop, Then Drop

Volatility in oil spiked in the last month. The trigger? War breaking out between Israel and Iran caused oil to surge to $77/bbl. However, quickly bearish signals emerged. The biggest was the U.S. bombing Iranian nuclear sites and oil was unable to make a move above the key high at $77/bbl.

Sure enough, oil collapsed as a ceasefire was declared. In two days it fell back to $64/bbl.

Based on technical analysis, traders and investors are closely watching the $64/bbl level. This is a key support. Should it fail to hold, oil is likely to fall all the way to $53.50. This level is the lower trend line of a parallel channel. This same parallel channel was the technical factor that capped oil from breaking above $77/bbl.

Overall, the key resistance remains $77, while support sits at $64 and $53.50.

Please refer to the chart above for the visual of these levels.

Written by Gareth Soloway, Chief Market Strategist at www.VerifiedInvesting.com