Tensions in the Gulf not helping oil

In theory, attacks on those tankers and actually any tensions in the Gulf, should give oil a bullish impulse. It works like this: any negative event that could decrease supply should increases prices. But these one-time events can be treated only as pure speculation and at the end of the day, what really counts is the global demand for oil and rising supplies are showing us that demand is slowing down. OPEC may be doing their thing (limiting their supply) but if demand is not cooperating (by going up), the price will not surge.

Technically, the biggest problems started at the end of May. In the last two trading days of the last month, oil managed to break the lower line of the bearish wedge pattern and the horizontal support at 58 USD/bbl. The first half of June is not any better as the price managed to reach the horizontal support at 51.3 USD/bbl. As you can see, the 4 on front is near. Demand is trying to avoid that by creating the double bottom formation. This pattern will give a buy signal only when the price breaks its neckline, i.e. the blue area around 55 USD/oz. As long as we stay below here, sentiment is negative and it seems that sellers have bigger chances of success.

As for now, it seems that the best option is to wait. Buyers can wait for the situation mentioned above and sellers can wait for the breakout of the 51.3 USD/bbl. support. If we consider the current trend, then the second option seems more probable.