• The price of crude oil remains unchanged, trying to break a three-day losing streak.
• British marines say Houthi rebels attacked a ship in the Red Sea.
• The US dollar index bottoms out, then recovers slightly.

Oil traded sideways Wednesday after three sessions of edged sell-offs after several news agencies reported that a tanker had been hit in the Red Sea by Houthi rebels. Delta Tankers confirmed that one of its ships, the Sounion, was attacked and suffered minor damage. This is highly unwelcome news at a time when Hamas is considering a ceasefire proposal in the Gaza Strip that both Israel and the U.S. have put on the table.

The U.S. Dollar Index (DXY), which tracks the U.S. dollar against six major currencies, is looking like oil, trying to break this week’s losing streak. However, the DXY had to hit bottom to do so, giving up all of its 2024 gains and literally flatlining for the year before a miniature rebound could take place. The main event this Wednesday is the release of the Federal Open Market Committee (FOMC) minutes ahead of Jackson Hole on Friday, along with a revision to the nonfarm payrolls index, which will likely change nonfarm payroll data for the year through March of this year.

At the time of writing, the price of crude oil (WTI) is $73.07 and the price of Brent crude oil is $76.79.

Oil News and Market Movements: Red Sea Attacks in Focus

• According to BP chief economist Spencer Dale, OPEC+ does not appear to have much scope, if any, to boost production because that would put additional pressure on oil prices in the face of increased supply from the United States and Brazil, Bloomberg reports.
• Uganda’s Energy Minister Ruth Nankabirwa said the country is continuing to work with TotalEnergies and Cnooc to finance a $20 billion oil exploration project.
• Delta Tankers said its tanker Sounion was attacked at least three times. It is still assessing whether the ship is drifting or not and continuing its course, Reuters reported.
• The overnight change in crude inventories from the American Petroleum Institute (API) showed a miniature gain of just 347,000 barrels. Still, that was well above the 2.8 million drawdown expected by analysts.
• This Wednesday, weekly crude oil inventory data from the Energy Information Administration (EIA) will be released. The previous figure was an boost of 1.357 million, and the expected decrease was 2.8 million barrels.

Technical Analysis of Crude Oil: Hand in Hand

Oil is trying to break its bad streak and start to recover, although the picture is rather grim. Still, the recent boost in attacks in the Red Sea could spell trouble for the ceasefire agreement that Hamas is currently considering, and if the situation escalates further, violence could quickly flare up again.

On the other hand, it becomes very challenging to be bullish when there are multiple resistance levels nearby. The first one to watch out for is the crucial $75.27. Next up is the double-level at $77.65, which coincides with both the downtrend line and the 200-day elementary moving average (SMA). In case the bulls manage to break through it, the 100-day SMA at $78.45 could trigger another rejection, just like it did last week.

On the other hand, the August 5 low of $71.17 is the best level to bounce off of. It wouldn’t be a bad idea to start considering levels below $70.00, especially if the ceasefire talks bear fruit and hedge funds start selling their speculative oil futures holdings. $68.00 is the first level to watch, followed by $67.11, which is the lowest point since the June 2023 triple bottom.

US WTI Crude Oil: Daily Chart