Crude oil price rose in the New York session on Friday as weak dollar fundamentals and a spike in geopolitical premium provided propulsion. Benchmark WTI crude price was up by 1.6% and traded at $67.48 per barrel, while Brent was up by 1.5% and traded at $70.47 at the time of writing.
Weak US Economy and Geopolitical Risk Support Oil Price Gains
The US economy printed out soft jobs data, weakening the US dollar’s standing. February’s Non Farm Payroll numbers came out at 151k, lower than the forecast figure of 159k. Meanwhile, the January figures were revised downward by 18k to stand at 125k. Unemployment rate rose to 4.1%, up from 4.0% and above a similar figure forecast by analysts.
These figures signal weakness in the US economy, which is likely to extend the US dollar’s recent decline. Crude oil is denominated in US dollars, and a weaker greenback typically leads to increased demand for the commodity. This development is likely to put oil price on growth path in the coming days.
Elsewhere, Russia conducted strikes against Ukrainian energy and gas infrastructure early on Friday, threatening a potential escalation. US President Donald Trump threatened to increase sanctions against oil-producing Russia, adding geopolitical risk premium on the commodity. Another disruption to the Russian supply side of the commodity could augur well for oil price upside.
Oil Price Prediction
The momentum on WTI oil price calls for further upside above $66.85. The commodity will likely encounter the first resistance at $68.00. A stronger momentum will break above that level and potentially test $69.00.
Alternatively, the price momentum could shift to the downside if action breaks below $66.85. With that, the first support will likely be at $65.80. Breaking below that level will invalidate the upside narrative. In addition, it could result in a stronger downward momentum to test $65.00.
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