Oil Prices Steady Amid Geopolitical Tensions and Supply Concerns

WTI crude futures remained steady around the $78.6 per barrel mark on Tuesday, hardly budging from the near-two-month low of $78.1 registered on May 3rd. This stability came as the perception of ample oil supply outweighed persistent geopolitical tensions. Despite efforts by mediators and an agreement by Hamas, the Israeli military cabinet unanimously dismissed a proposed ceasefire, continuing its airstrikes in Rafah, Gaza. However, subdued indications of escalation and military involvement from Iran ensured uninterrupted oil tanker activity through the Strait of Hormuz, diminishing concerns about additional US sanctions. Additionally, Saudi Arabia's decision to increase the official selling price of its Arab Light crude oil grade by 90 cents per barrel for June, surpassing market expectations by 30 cents, hinted at the possibility of OPEC's largest member advocating for the extension of output cuts into the second quarter.

After yesterday's reaction, oil started today with another decrease and continues in the same manner. If the movement persists, the first support level to watch would be 77.60. This level is significant as it represents a 0.5 retracement level of the rally that oil has undergone since the beginning of the year, and its breach could deepen the selling pressure, potentially leading to pullbacks towards 76.50 initially, followed by 75.70 levels. Conversely, if the price continues yesterday's rebound and turns upwards, the first resistance level to watch would be 79.30. Breaking above this zone would potentially push the price towards the 200-day moving average level at 80.20 first, and then towards the 81.00 band.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
82.10	81.00	79.30	77.60	76.50	75.70