Crude oil WTI pauses at 65.55 as tension in the Middle-East escalate

• Tensions in the Middle-East intensify with Yemen sending a missile.
• Shanghai Futures Exchange introduces its new crude oil contract.

Crude oil is trading at around 65.55, down 0.55% on the day as investors took some profits from last week bull move. 

Fears of an all-out trade war, which could hurt oil demand is starting to ease as China and the US have started negotiating to facilitate the US access to Chinese markets. 

“Such a deal would include Beijing opening its markets further to U.S. exports, reducing its tariffs and stopping pressure on U.S. companies in China to transfer their technology to Chinese joint-venture partners.” said US Treasury Secretary Steven Mnuchin.

Over the weekend tension in the Middle-East was exacerbated with Yemen (Iran ally) firing a missile targeted to Riyadh, Saudi Arabia’s capital. However, the missile was destroyed by Saudi air defense. 

In Asia, the brand-new Shanghai crude oil futures have been introduced on the Shanghai Futures Exchange and the contract is being traded by investors, commodity merchants with a good volume. 

Hedge funds and other money managers raised their net long U.S. crude futures and options positions in the week to March 20 after two weeks of cutting bullish bets, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

On Friday, the CFTC reported that Hedge funds and money managers increased their net long US crude futures and options positions in the week to March 20. 

Crude oil WTI daily chart

The market tested the 2018 high forming a double top. Support is seen at 64.85 and at 36.40 which are respectively the 78.6% and 61.8% Fibonacci retracement from the last January-February bear leg. Resistance is seen at the 66.70 level which is the high of the year followed by the 70.00 psychological figure.