When the war between Israel and Hamas began, crude oil prices spiked due to concern that the conflict would spread to affect Iranian oil production and cause supply disruptions in the region. At the time WTI (Western Texas Intermediate) was trading in the low 80’s and then spiked to just below 90 on 10/20. From there the price has dropped to just above 75 today (11/8).Why has the price of crude dropped so far and fast?
In my personal opinion, I think there’s a good chance that Hezbollah will attack Israel and the conflict will, regretfully, expand. If that does happen, crude will rip higher.However, the chart does not seem to agree with me, at least at this time. For the time being, oil looks like it’s either headed even lower or will stabilize and stagnate in the mid-70s until there is a catalyst to take it higher.Oil and gas equities such as CVX, XOM, EOG, COP, and most others have gone along with crude for the ride down and, although they seem to be at at attractive levels now, it doesn’t look like they’ll be going higher, fast, any time soon.Of course, everything could change if the war in the Middle East goes regional. But unless that happens, all the economic and technical signs are pointing to crude staying in the 70’s for the near future.More By This Author:Crude Is Pulling Back. Is This A Buying Opportunity?
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