Last week, crude oil reached its highest peak this year at $112.24. However, it declined to $104.21 earlier this week when military action against Syria became less certain. Did this drop change the outlook for crude oil? Can oil climb above $110 in the near term once again? If you want to know our take on these questions, we invite you to read our today's essay.

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The crude market is always sensitive to Middle East conflict. As you remember, prices rose to $115 on the unrest in Libya two years ago and to $110 on Iran’s nuclear program. In the previous week we saw similar price action.

On Wednesday, light crude surged to its highest level since May 2011 and reached over $112 per barrel on concerns that the conflict in Syria would spread and threaten exports from a region which accounts for 35 percent of the world oil production.

However, in the following days, the price of light crude declined as the prospect of imminent attacks on Syria receded. Should we believe that the Syrian conflict poses only a short-term risk and without its impact the price of light crude will drop further? Are there any other factors, which may have an impact on future oil prices? What is the current technical picture for the oil market? We invite you to check our Oil Update. Have a nice read.

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In July the geopolitical risks in the Middle East, the underlying strength in the U.S. economic data and the speculation about shrinking U.S. crude stockpiles have resulted in a rally. It took the price of light crude not only above the psychological barrier of $100, but also resulted in a new local top at $108.93 per barrel.

Since then, the situation hasn’t changed much and crude oil is still trading in a narrow range between the June top and the August bottom. It seems that investors are reluctant to make a major move until the Federal Reserve clearly signals its intentions.

On the one hand, last week’s positive global economic data improved the outlook for oil consumption and resulted in an increase above $106 per barrel on an intraday basis on Friday. On the other hand, the same data raised fears that the Federal Reserve may start tapering its commodities-supportive stimulus measures as early as September.

What’s next? Can oil climb above $110 in the near term? Will it result in higher levels of the oil index? Or maybe the oil bears will return and trigger a deeper correction? If crude oil moves lower, will it trigger lower prices in oil stocks? Or maybe these relationships do not look as they seem at the first sight? Could they have any implications for gold?

Today, we take a look at the charts from different vantage points. If you want to know our take on these questions, we invite you to read our today's Oil Update.

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