FX.co ★ CL/Crude Oil

Early on Monday, August WTI crude oil is trading close to $70.31, up roughly $1.08 throughout the session. Brent is up about $0.96 to $73.56 in September. The purchasing began before most traders arrived at their desks, and both contracts are rising into the 50-day moving averages that limited last week's selling. Tankers passing through the Strait of Hormuz and the release of the war premium were factored into Friday's 3.74% loss in WTI and 3.84% decline in Brent. It was immediately put back in over the weekend. In response to Iran's strikes on commerce in the Strait, the United States attacked Iranian military sites over the weekend. Iran retaliated by attacking locations in Bahrain and Kuwait with missiles and drones. President Trump threatened that Iran would be destroyed and that the United States might no longer be able to be reasonable and might have to "militarily complete the job". Two weeks ago, the mid-June memorandum of understanding and ceasefire appeared to be moving forward. This morning, it doesn't seem like much. Given Friday's close and Sunday's early opening, traders' responses to the 50-day moving average at $70.05 are likely to set the tone for the August crude oil futures market. Buyers will be present if the price continues to rise beyond $70.05. Look for an acceleration into $72.48 if this sets off a short-covering rally. If purchasers can get beyond this obstacle, momentum will increase. Short-covering is expected to be the driving force behind any rally. A persistent advance over the 50-day MA and the effective establishment of a support base are likely to trigger real buying. A persistent decline below the 50-day MA will initially target the price difference between $66.96 and $66.20 as well as last week's low of $68.56.