Oil trades sideways amid fresh Red Sea attacks, Ukraine targeting Russian facilities

• Oil broadly consolidates after dipping 3.60% in two days on profit-taking. 
• Ukraine is stepping up efforts to attack Russian Oil installations. 
• The US Dollar Index trades back below 101.00 after rebounding on the back of Nvidia earnings missing estimates. 

Oil prices are starting the European session trading broadly flat, halting a two-day decline after traders were quick to take profit on the back of earlier news that Libyan Oil fields were set to shut down over local political issues. While that news has faded into the background,Ukraine and the Red Sea attacks are on the forefront again: The Greek ship attacked last week in the Red Sea seems to be leaking Oil, according to the Pentagon, while Ukraine is attacking Russian Oil and artillery depots in Rostov Kirov and Voronezh.

The US Dollar Index (DXY), which tracks the performance of the US Dollar against a bucket of currencies, is sliding back below 101.00. The DXY saw inflows on Wednesday after Nvidia earnings missed estimates. With two days ahead of very important economic data points, the US Dollar Index could make some substantial moves by Friday's close. 

At the time of writing, Crude Oil (WTI) trades at $74.05 and Brent Crude at $77.53.

Oil news and market movers: Ukraine is taunting Russia

• Ukraine's military claims it has striked strategic oil and artillery depots in the Rostov Kirov and Voronezh regions, Reuters reports.
• Bloomberg reports that OPEC might rethink its cut-unwinding plans for Q4 in case a lack of growth in Oil demand takes place. OPEC will want to avoid a slump in prices at any cost.
• The US Energy Information Administration (EIA) reported a far lower drawdown than expected in its weekly report on Wednesday. The actual number came in at a decline of 846,000, way less than the 3 million drawdown expected. The previous release was a drawdown of 4.649 million barrels.
• Reuters reports that the Pentagon has released information on the Greek vessel in the Red Sea that was attacked last week, and might be losing oil. Still, it looks like an environmental disaster can be avoided, according to sources. 

Oil Technical Analysis: Limited lifespan

Oil is trying to halt the profit taking that has occurred in the past two trading days. From a pure technical point of view, the risk is tilted to more downside. Seeing that the brief rally was unable to break any technical upside levels and even reversed ahead of them means that traders were in it for the short term move and will step out as quickly as they can, limiting the lifespan of this rally. 

On the upside, the double level at $77.65 aligns with both a descending trendline and the 200-day Simple Moving Average (SMA). In case bulls are able to break above it, the 100-day SMA at $78.45 could trigger a rejection.  

On the downside, the low from August 5 at $71.17 emerges as the first support. Under $70.00, the $68.00 big figure is the first level to watch followed by $67.11, which is the lowest point from the triple bottom seen back in June 2023. 

US WTI Crude Oil: Daily Chart