Crude Oil Market Analysis:

Oil prices were range-bound in early Asian trade on Wednesday, October 16th, with WTI crude hovering around $70.90 per barrel.  Oil prices plunged more than 4% on Tuesday, hitting a near two-week low, as the demand outlook weakened and reports emerged that Israel would not target Iranian nuclear and oil facilities, easing concerns about potential supply disruptions.  Both major oil benchmarks have shed roughly $5 this week, almost entirely erasing the gains made on fears that Israel might strike Iranian oil facilities in retaliation for Tehran's missile attacks on October 1st.

Brent crude futures settled at $74.25 a barrel on Tuesday, down $3.21, or 4.14%. US crude futures settled at $70.58 a barrel, down $3.25, or 4.4%. Earlier in the session, both benchmarks had tumbled as much as $4 to their lowest levels since early October, adding to Monday's losses of around 2%.

The sharp decline in oil prices on Tuesday was driven by a combination of factors, including a deteriorating demand outlook and reports that Israel would avoid targeting Iranian energy infrastructure.  Meanwhile, gold prices edged higher, buoyed by optimistic comments from central bank officials.

Both OPEC and the International Energy Agency (IEA) this week lowered their forecasts for global oil demand growth in 2024, with much of the downward revision attributed to China.  Market participants will continue to monitor geopolitical developments and shifts in market sentiment.

Crude Oil Technical Analysis:

Oil prices opened lower at $70.68 per barrel on Tuesday before briefly rebounding to $71.12. However, the rally quickly faded, with prices falling to a low of $70.6 before recovering to $71.1 during the US trading session.  However, renewed selling pressure in the latter half of the US session led to a sharp decline.

The daily chart shows that the recent rally in oil prices has stalled, with prices resuming their downtrend.  The daily candlestick pattern is a bearish engulfing pattern with a long lower shadow, confirming the downward pressure.

4-Hour Chart:The 4-hour chart reveals that oil prices are facing resistance at higher levels, with the Bollinger Bands narrowing and starting to point downwards.  Prices are trading below the middle band, indicating a continuation of the bearish trend.  The current price action suggests a potential "one-two" bearish continuation pattern.

Overall:The short-term outlook for oil favors selling on rallies with selective buying on dips.

Key Resistance Levels: $72.0 - $72.5

Key Support Levels: $69.7 - $69.2

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