President Donald Trump’s Twitter outbursts against OPEC, US sanctions on Iran and protectionist trade policies certainly made him a key player in Oil markets during the third trading quarter.

In a move to tame Oil prices ahead of the US mid-term elections, Trump demanded that OPEC boost output.

But the cartel’s rejection of Trump’s demand resulted in Brent Crude rallying to levels not seen since November 2014.

With OPEC and Russia ruling out any immediate increases in Oil production and stating that markets remain “balanced”, the near-term outlook for Oil points to further upside potential.

There is an increasing consensus that Oil markets could tighten further towards the end of 2018.

Ongoing supply disruptions in Libya, falling output from Venezuela and looming US sanctions against Iran have fuelled uncertainty around the global supply outlook.

US Crude inventories have fallen to the lowest levels since 2015, while roughly 1.7 million bpd of Iranian Crude are expected to leave the markets by November.

Although Saudi Arabia and co are signalling a willingness to raise production if needed, the limited availability of spare capacity to replace Iranian production remains a serious cause for concern.

If Venezuelan and Iranian exports continue to fall during the final trading quarter of 2018, Brent Crude prices may end up attacking $90 and beyond by year end.

Indeed, the pendulum certainly swings in favour of higher Oil prices in the short-to-medium term, especially if nothing is done to plug the looming supply gap in November when US sanctions hit Iran.

However, the demand side of the equation could still present an opportunity for bears to re-enter the scene in the longer term.

Escalating trade tensions present a significant threat to global growth and stability.

If a full-blown tit-for-tat trade war between the world’s two largest economies becomes reality, global growth will take a hit consequently denting demand for Crude.

Investors should brace for potential volatility in the Oil markets ahead of the US mid-term elections.

With higher global Oil prices bad news for US consumers, President Trump may lash out at OPEC again in an effort to push Oil lower.

This form of verbal intervention could end up sparking volatility, especially if Saudi Arabia and Russia shrug off Trump’s demands and leave output unchanged.

Regarding the technical picture, WTI Crude is heavily bullish on the daily, weekly and monthly time-frames.

The solid weekly breakout above $70.00 confirms that this remains a bull story with the next key levels of interest at $74.00 and $80.00, respectively.

Weekly traders may target $75.00 once the $73.60 level has been breached.

Focusing on the daily picture, WTI remains in a healthy uptrend with $70.00 acting as a support level.

There have been consistent higher highs and higher lows while the MACD also trades to the upside.

A breakout above $73.60 could inspire a move higher towards $77.90 and $80.00.

With Oil heavily supported by geopolitical risk factors and the technical picture in favour of further upside, bulls remain in firm control.