The oil quotation is threatened by the conflict in Yemen

The price of oil gets a new challenge with the outbreak of the conflict in Yemen. The Houthi insurgency forced the Yemeni President to leave the country and this is when Saudi Arabia intervened  in an attempt to reestablish the order. The price of oil rapidly changed its position with Brent going up to 59.74 and WTI running to 52.47. Yemen its not an important oil producer, but the country is essential to ensure transport routes, being a neighbor of one of the most important maritime transit routes. In addition, there is currently conducting a confrontation between Iran and Saudi Arabia that can take serious proportions.

The oil quotations are currently testing the local support zone, but it won’t be a surprise to see positive spikes as the situation can become more difficult to be handled. For the next week, if things aren’t getting better, WTI could easily run to the 55 dollars per barrel resistance while Brent may go in the 63 dollar region. Looking at things from an older perspective, the oversupply in the market is a reality that will soon make its mark on the price. The lack of storage locations may determine the producers to sell the oil as cheap as the consumers want in order to get rid of it. In the long term, oil quotation is in danger to go even lower than we thought it could go.

EURUSD is respecting the range evolution (1.0857 – 1.1028) while recently, market participants felt more comfortable investing in the American dollar. Yesterday, both Bullard and Lockhart  sent hawkish messages while the Unemployment Claims (down to 282k) and Flash Services PMI (up to 58.6 points) offered more support to the dollar. Today is due to be reported the USA’s Final GDP, while later, Janet Yellen will speak about monetary policy at the Federal Reserve Bank Conference titled “The New Normal for Monetary Policy” at San Fransisco. The dollar could receive additional support.

The gold’s quotation finally managed to break the 1200 dollars per ounce resistance, but the price is not stable at all. The 1200 region, now a support level, is pretty much fragile, so a breakdown could push the price lower towards 1190 dollars.

Both NZDUSD and AUDUSD seem to be attracted by local support areas (0.7545 and 0.7760) as both the currency pairs are still respecting the rules of the downtrend and prices have been rejected by local resistance areas.

The German index DAX recovered losses from yesterday and now is near the 11900 resistance zone. The pressure on the minimums threatens to increase as the situation with Greece is still sensitive. Recently ECB’s Weidmann has said he is against expanding the emergency liquidity program for Greece while the Hellenic state promises to solve the problem of implementing reforms on Monday. In addition, conflicts in the Arab region could encourage the sale of shares either European or American.