Refinery owned by Russian crude oil producer OAO Rosneft
Russian oil refinery REUTERS

Crude oil reversed a four-week stretch of losses in the week to 18 July helped by rising geopolitical tensions, of late boosted by the Malaysian jet crash that sparked fears of fresh Russia sanctions.

The West Texas Intermediary (WTI) variety of crude for spot delivery traded near $103/bbl at 15:50 GMT on Friday, up more than 2.3% from last week's close.

The commodity had ended the past four weeks lower, after hitting a nine-month high of $107.65 in the week to 13 June. The downward reversal was helped by Iraq's statement that it will keep supplying oil to its overseas buyers.

Before the latest intensified Israel-Gaza conflict triggered this week's rebound, the commodity had touched a one-month low of $100.04.

Reports that pro-Russian rebels were behind the shooting down of the plane triggered fears of further worsening of Russia's ties with the West and likely tightening of trade sanctions against the country.

Russia being the world's second largest producer of crude oil, such sanctions will hit the global supply of the commodity.

Israel's decision to send ground troops into the Gaza Strip served as another catalyst. Any conflict in the Middle East, the world's largest oil producing region, will always affect crude prices.

Price Outlook on Charts

With the recent rally, the spot WTI has rallied through the 23.6 and 38.2 retracements of the 13 June to 14 July selloff and touched the 50% line before some profit-booking.

The immediate resistance will be the 61.8% Fibonacci of $104.75 ahead of $106.25 and then a retest of the 13 June high.

In case the geopolitical tensions ease in the coming days, crude oil will find its first support near $100.80, the 23.6% level, and then $100.04, the 15 July low.

On the weekly chart, crude oil has just managed to bounce off the downside barrier of the uptrend since 2009 and has its next important resistance near $105, similar to what the daily chart suggests.

A decisive break of the same will take it through the $106 mark easily and open the doors to $110.

On the downside, the first major support is $98.00 and a break of that will see little stops until $92.00.

WTI Crude Weekly
WTI Crude Weekly IB Times UK/FXStreet