Crude Oil rallies after Biden administration says no to bombing Iranian oil fields

• Crude Oil jumps over 2% on Monday after the Biden administration verbally pushed back on targeting Iranian oil fields. 
• Markets are pricing in even more risk premium, with uncertainty ruling now over Israel's next step in this escalation. 
• The US Dollar Index steadies near recent highs ahead of a Fed-packed Monday. 

Crude Oil is sprinting higher on Monday after Israel got a red light on its request to bomb Iranian oil fields. United States (US) President Joe Biden said on Friday that it was under consideration, suggesting that other targets should be looked for instead. With no headlines that the Biden administration has given the green light, it looks like Israel will revert to other actions, which adds to even more uncertainty. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, is trading broadly flat on Monday. All eyes will be on the September's US Consumer Price Index (CPI) release later this week. In the run-up to those numbers, markets will hear from no less than four Fed officials this Monday. 

At the time of writing, Crude Oil (WTI) trades at $75.78 and Brent Crude at $79.53.

Oil news and market movers: Markets unease of Israel's uncertainty

• Oil production is suspended at Kashagan's major Gas and Oil field due to the start of scheduled overhaul, the Kazakhstan Ministry of Energy confirms to Interfax.
• A Goldman Sachs note from head analyst Daan Struyven sees Brent hit $90 when Iranian exports would be disrupted, Bloomberg reports. 
• Tension in the Middle East remained elevated with over the weekend Israel sending in troops in northern Gaza, while aerial attacks and ground maneuvres in Lebanon were taking place at the same time, Reuters reported. 
• Option markets are seeing a wave of buyers coming in with an appetite for call options, sending implied volatility for Brent to the highest level in almost a year, while money managers added more net-long positions to their portfolios, the Chicago Futures Trading Commission reported.

Oil Technical Analysis: There goes $75.00

Crude Oil prices are going through the roof again, with WTI popping above $75.00 for the first time since the end of August. The fact that the Biden administration has not really confirmed or fully rejected the call from Israel to attack Iranian oil fields is creating ever more uncertainty for markets. With uncertainty comes risk premium, which is being priced this Monday. 

The current Crude Oil price level, with the red descending trendline and the 100-day Simple Moving Average (SMA) in the chart below at $75.74 just hovering above it, makes that region very difficult to break through. Once snapping above there, the 200-day SMA at $77.12 should refute any further upticks. 

On the downside, old resistances have turned into supports. First is the 55-day SMA at $72.73, which acts as a potential first line of defence in case of any retreat. A bit further down, $71.46 comes into play as second support before looking back to the $70.00 big figure and $67.11 as ultimate support for traders to buy the dip. 

US WTI Crude Oil: Daily Chart