With the US and UK carrying out strikes in Yemen, the tensions in the Middle East is pushing oil prices higher on the day. Oil tankers are reportedly avoiding passage through the Red Sea in order to stay away from the conflict that is adding to the situation at the moment. And when you look at the technical picture, the fundamental developments really couldn’t have been timed better for oil:
WTI crude oil weekly chart
Once again, prices have managed to stave off a drop below the 200-week moving average (green line) and that looks to be the case now in back-to-back weeks to start the new year.
In the bigger picture, oil’s resilience and push higher this week just adds another dent to the disinflation narrative this week. It’s no major blow whatsoever but it likely will help to drag out the process even longer. And that might be something that market players might not be too happy with given their impatience to price in central bank rate cuts before mid-year.