Forex▲ Bullish
Crude Oil Holds Near 50-Day EMA as Middle East Tensions Build
WTI crude holds near $78.50 as the 50-day EMA caps gains for a third session. Traders cite weekend Middle East risk premium. A break above $79.50 or below $77.50 sets the next leg.
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Crude oil futures held near the 50-day moving average on Friday, with traders pointing to weekend headline risk from the Middle East as the dominant driver.
West Texas Intermediate crude for September delivery traded at $78.45 a barrel in late New York action, roughly flat on the session after testing the 50-day EMA for a third consecutive day. The level has acted as resistance since Tuesday, with sellers stepping in each time the contract pushed above $78.80.
Brent crude for October delivery followed a similar pattern, hovering near its own 50-day EMA at $82.10. Both benchmarks have been rangebound since Monday, when a flurry of diplomatic statements from the region failed to produce a ceasefire.
"The market is pricing a risk premium for the weekend," one New York-based crude trader said. "If there is no escalation by Monday, some of that premium comes out. If something happens, oil gaps higher."
The 200-day EMA sits about $2.50 below current levels for both contracts, offering a technical floor that has held since early June. A break below that level would open the door to the $74 area on WTI, several traders said.