Oil prices pushed higher on Tuesday European morning due to fears of reduced supply coming forward, as the geopolitical tensions from the past weekend could have interfered with the supply.

The matter is said to have cooled off, however various news indicate it could be the opposite and the tensions may have just started.

During the weekend, the US struck Syria with airstrikes and missiles hitting specific sites.

Syria as a country does not own Oil but Oil pipelines coming from Iraq are stretched on the border line which pass to neighbor countries and so the danger of damaging a tube is not far away.

This fact is considered very bullish for the oil market and is kicking prices higher keeping traders on their toes.

Moreover, there is a back and forth ongoing dispute between US and Russia which do not seem to be getting along at all for some time now.

However, from an oil perspective both countries remain major influencers of oil prices.

Russia remains one of the strongest Oil producers if not the strongest among the OPEC and allies group supplying China which is literary vanishing oil gluts increasingly.

On the other hand, US Shale oil producers are over flooding the market with Oil supply.

US oil rigs have increased by +7 since the last count being performed on the 13th of April and there are now 815 active oil rigs in total.

It could be the case that, due to the geopolitical issues taking place in Syria, the oil market is immune to the financial data release by the Energy Information Administration (EIA).

For example, last week on the 11th of April the U.S. Crude Oil Inventories were released with a 3.306M barrels surplus in contrast to a forecast of -0.600M.

Oil prices didn’t really react to the huge contrast of actual vs forecast as an increase in crude inventories implies weaker demand and is a bearish sign for crude prices.

In antithesis, crude oil prices moved higher with a positive upward momentum leaving everyone puzzled, displaying that overall demand is exceeding supply.

Furthermore, Venezuela is currently presenting its weakness to the market, with its oil output significantly declining.

The Venezuelan oil workers are requesting better working environment to make up for what they called “suffocating” economic conditions.

On other news, OPEC and oil teammate Russia will consider extending their oil production cuts moving into the next year.

A meeting is set for the coming June to assess the market, Kuwait Oil Minister stated.

Russia a major partner in the group along with Saudi Arabia, said this month that the alliance could last for the foreseeable future showing again the excellent relationships and cooperation the two countries have between them.

On Tuesdays European afternoon traders are anticipating the API weekly stocks to be released later for more indication as to where the sentiment resides.

Technical Analysis on WTI Crude Oil

Crude Oil prices are currently trading at $65.76 per barrel.

Oil prices holding above $65 per barrel is a very strong bullish indication that was not considered as realistic from many market participants and observers at the start of the year.

Any further news on Syrian attacks or threats could strengthen Oil prices.

If the bulls take the reins we could see oil prices move towards the $67.50 (R1) resistance level. This price was reached in the past week and is the highest since 2014.

A drawdown instead of a surplus with the pending news to be released on Wednesday by EIA could support that scenario also.

Crude oil has been moving in a sideways manner since the 11th of April, between the $67.50 (R1) resistance level and the $65.50 (S1) support level.

It could be the case for the commodity to persist between these two levels for the following days until the end of the trading week.

If the bears are to take the driver’s seat, we could see the black gold dropping and reaching the 65.50 (S1) support level and even breaching it.

This scenario could be supported with a surplus realized from the Crude Oil inventories news or even easing of the Syrian tensions.