Oil spikes with setback on Kurdish Oil Exports

• Oil jumps in the green with a double headline in favor of a Crude uptick.
• WTI Oil snaps above $82 after testing the pivotal level around $80.63 on Monday.
• The US Dollar Index ticked below 106.00 after strong Services PMIs from France, Germany and the Eurozone.

Oil prices are recovering from a small dip on Monday, which saw Crude falling towards a key pivotal level on the daily chart. The uptick on Tuesday comes on the back of US sanctions against Iran being set to become law by next week, ratcheting up tensions again. The second supportive element comes from a setback in talks between Iraq and Turkey on resuming Oil flows from Iraq's Kurdistan fields, needing more talks to get the pipeline operational again after being closed for more than a year. 

The US Dollar Index (DXY), which tracks the US Dollar's value against six major currencies, faces a retracement and dips below 106.00 on Tuesday. Its biggest contributor, the Euro, which accounts for 57.6% of the basket, goes against the Greenback. The Euro jumped higher after surprise beats for both France,  Germany and the Eurozone's Services Purchasing Managers Index (PMI) data for April. Although the manufacturing sector is still in contraction, markets ignored that fact and sent the Euro higher on the back of the Services strong figures.

Crude Oil (WTI) trades at $82.27 and Brent Crude at $86.73 at the time of writing.

Oil news and market movers: Iraq Oil flow back in play

• The reopening of the Iraq-Turkey oil pipeline would add 500,000 barrels per day to the market. Turkey has already signalled that it is open and ready to receive flow after it had to halt the pipeline output due to earthquakes in February 2023, Bloomberg reported. 
• Iran sanctions are expected to have a muted impact on Oil prices, according to Jim Lucier from Capital Alpha Partners. Lucier pointed out that US President Joe Biden will not want to risk another increase in Oil prices, which could trigger another surge in inflation and might risk his reelection possibilities in the upcoming US elections in November. 
• At 20:30 GMT, the American Petroleum Institute (API) is set to release the weekly Crude Stockpile Changes for the week ending April 19, which is expected to rise by 1.8 million from a build of 4.09 million barrels seen the week before. 

Oil Technical Analysis: Bounce higher

Oil prices are in the green on Tuesday as markets trade at a solid equilibrium after tensions eased in the Middle East. However, the current price action remains fragile with US sanctions set to come in effect next week. Although they might not target Iranian Oil, they could trigger a redirection from Iran's Oil towards other clients and away from the US and Europe. The Middle East remains thus at risk,  requiring a lingering premium to remain in the price action for Oil for quite some time. 

With geopolitical tensions lingering, the November 3 high at $83.34 and the $90 handle should remain as resistance on the upside. One small barrier in the way is $89.64, the peak from October 20. In case of further escalating tensions, expect even September's peak at $94 to become a possibility, and a fresh 18-month high could be on the cards. 

On the downside, the October 6 low at $80.63 is the next candidate as a pivotal support level. Below that level, the 55-day and the 200-day Simple Moving Averages (SMAs) at $80.37 and $79.67 should halt any further downturn. 

US WTI Crude Oil: Daily Chart