FxWirePro- North Korea’s Troop Movements Fuel Crude Oil Prices as Market Reacts

Crude oil prices are rising due to concerns about supply, reaching a high of $72.25 and currently trading around $71.25.

Recent reports indicate that North Korea may send troops to aid Russia in the Ukraine conflict, raising alarms in Europe. Claims suggest that thousands of North Korean soldiers might soon join Russian forces, supported by North Korean ammunition. In response, Lithuanian Foreign Minister Gabrielius Landsbergis is advocating discussions about deploying European troops to Ukraine. This potential North Korean involvement could heighten tensions and complicate the dynamics between NATO and Russia, emphasizing their historical relationship with Western nations.

Crude oil inventories increased by 5.474 million barrels, well above the expected 0.7 million rise, signaling a major shift in supply. Gasoline inventories also rose by 0.878 million barrels, contrary to predictions of a decrease. Meanwhile, crude stockpiles at the Cushing delivery hub fell slightly by 0.346 million barrels, ending a four-week increase. Distillate inventories decreased by 1.14 million barrels, which is less than the anticipated reduction of 2 million barrels.

The US dollar index remains bullish, as does the US treasury yield, which is generally negative for commodities. Major resistance is at $72.50; breaching this level could push prices up to $73, $73.40, $74, or $74.48. A significant trend reversal would only occur if prices rise above $80.

Near-term support is around $69.50; if this level is broken, targets could drop to $68.45, $67, or $66. According to the 4-hour chart indicators, the ADX is bearish and the CCI is neutral at 50.

It may be wise to consider buying on dips between $70.80-85, with a stop loss set at around $69.50 and a take-profit target of $75.