WTI oil gaps higher and rises further $2.5 as Middle-East conflict shakes oil markets

WTI oil opened with $2 gap higher on Monday and advanced further $2.5 in Asian session, as global supply concerns deepened following the latest wild clashes in the Middle East.

Fresh strength reversed so far over 38.2% of the recent $95.00/$81.52 pullback and last week’s nearly 9% drop (the biggest weekly fall since March), adding to upward prospect..

Reversal of corrective pullback occurred just above the top of rising daily cloud, which provides solid support to near-term action.

Close above cracked Fibo barrier at $86.67 (38.2% of $95.00/$81.52) is needed to boost reversal signal and expose targets at $88.26 (50% retracement) with stronger acceleration to challenge psychological $90 barrier.

On the other hand, failure to clearly break $86.67 pivot would question fresh bulls, but near-term bullish bias expected to remain in play while the action stays above broken 55DMA /Fibo 23.6% ($84.70).

Daily studies firmed (RSI / 14-d momentum are rising) though more work at the upside still needed to verify bullish signals.

The situation in the Middle East (anything that happens in this region always impacts oil markets) remains fragile, with threats of escalation which would provide additional volatility and more significantly destabilize currently unaffected supply-demand balance.

Res: 86.67; 87.21; 88.26; 88.94
Sup: 84.70; 83.24; 81.52; 80.00