First OIL Trades of World War 3?

Oil markets found a bid overnight as traders reacted to news the US military led a coalition of Arab governments in attacking ISIL positions and oil installations in Syria. The Obama administration had famously resisted an official military incursion into Syria for several months, a policy that included backtracking on the President's infamous "cross a red line" statement.

While it is too early to determine if this will lead to a sustained or renewed military campaign in the region - and this blog is certainly not one to warmonger - a protracted military intervention may eventually result in today's campaign being an opening salvo to a possible World War III scenario. Not exactly assassination of Archduke Franz Ferdinand or bombing of Pearl Harbor-type stuff, but historians with the benefit of hindsight will invariably seek to frame any future war in the context of a singular event. US military action in Syria may eventually fit that bill.

Brent crude oil was pushed higher during the Asian session, eventually trading at an intraday high around US$ 97.82 during the North American session before moving lower on the day. Brent's Daily chart isn't anything exciting, but take a peek at its Weekly chart to see how the Weekly High coincides perfectly with a retracement extension level.

Moving westward across the oil complex, we note that West Texas Intermediate (WTI) has outperformed Brent today. The market found support around the US$ 90.51 area and pushed the pair higher to test  resistance around the 91.72 area, representing a short-term 50% retracement level.

The futures traders who first pushed oil futures above the psychologically-important US$ 100.00 figure around the time of the Bush-led war in Iraq reportedly did so at a loss, just to say he was the first one across the tape in the name of infamy.  We're currently below that level, but history may repeat itself on the charts sooner rather than later if the markets perceive this to be the beginning of another World War.

Please view today's video about trading action in Brent crude and WTI.

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