Oil Prices Fall Despite Rising Middle East Tensions

Crude Continues LowerOil prices remain under pressure as we start the new week. Crude futures are in the red on Monday, extending losses from last week as the market continues to depreciate. The sell off comes despite rising tensions in the Middle East with the US and UK carrying out further airstrikes over the weekend. US/Iran tensions have become the latest flashpoint in the Middle East yet, despite violence and risk of escalation, oil prices remain offered.Fed Rate-Cut Pushback Dampening Oil PriceThe reaction in oil markets suggests that for now, traders are focusing more on developments in the US and expectations regarding future Fed policy. Following yet another strong showing in last week’s US jobs data, traders have scaled back their near-term US rate-cut expectations. Indeed, speaking on ’60 Minutes’ yesterday, Fed chairman Powell warned that the Fed will likely not cut rates in March with further data needed to confirm that inflation is heading down the bank’s 2% target sustainably.US Data on WatchWith US rates now looking likely to stay at elevated levels for longer, commodities prices (including oil) are facing some near-term headwinds. As such, expect any further US data strength and/or hawkish Fed commentary to see oil prices trading lower this week.Technical ViewsCrudeThe failure at the 77.64 level and bull channel highs has seen the market reversing sharply lower. Price is now testing the 72.61 level support and the bull channel lows. This is a key pivot for price with a break lower here opening the way for a test of 66.79 next, in line with bearish momentum studies readings.