Crude oil has moved back to the upside amid renewed concerns about a possible resumption of hostilities in the Middle East. According to a Reuters report citing U.S. officials, the State Department is preparing to order the departure of some personnel and family members from U.S. embassies across the Gulf. The preparations reflect concerns about renewed hostilities, particularly involving the Iran-aligned Houthi militia in Yemen.

The headline adds another layer of uncertainty for oil traders. The potential for progress on diplomacy can bring prices lower, but concerns about renewed fighting can quickly bring buyers back into the market. The latest report puts the focus back on the risks surrounding regional security and energy supplies.

Technically, crude oil is trading at $98.30. The rebound has taken the price back above its 100-hour moving average at $97.81 and toward a retest of the high of a swing area at $98.48. Buyers are making a play, but they are approaching a level where sellers could look to lean and define their risk.

The $98.48 level is the next key test. Getting above that level—and staying above it—would strengthen the bullish bias and open the door for further upside momentum. Conversely, if sellers can keep a lid on the price against that level, the rebound could stall and rotate back toward the 100-hour moving average.

On the downside, that moving average at $97.81 is now a close risk-defining level for buyers. Moving back above it has improved the short-term technical picture. Buyers would now like to see support develop against it on a corrective dip. Stay above, and the recovery remains intact. Move back below, and some of that positive technical progress starts to unravel.

So the headline has brought renewed geopolitical concerns into focus, while the technicals give traders levels to measure the response. Buyers have recovered the 100-hour moving average. They now need to get through $98.48 to take more control.

This article was written by Greg Michalowski at investinglive.com.