Oil prices are sinking lower as several world leaders have scrambled to make an appearance in Tel Aviv to demand a more humane and humanitarian approach for the retaliation against Hamas. Little by little humanitarian help is being allowed on the field in Gaza, though several request have been issued by state departments from foreign countries, calling their citizens to evacuate the area in light of a possible massive ground offensive. As the days pass and the ground offensive is being delayed, markets are pricing out the risk premium as the probability of the offensive actually happening, will diminish.

Meanwhile, The US Dollar (USD) is facing headwinds as it looks that its months-long rally has officially halted. Traders are bracing for two big data points later this week, with on Thursday the US Gross Domestic Product (GDP) numbers and on Friday the Fed’s preferred inflation gauge with the Personal Consumption Expenditures Index (PCE). A contraction or pullback in the numbers could mean another leg lower in the Greenback’s performance. Crude Oil (WTI) trades at $87.86 per barrel, and Brent Oil trades at $91.20 per barrel at the time of writing. Oil prices have had a second week of solid gains in their performance, though the rally starts to stall now. With again a delay in the possible ground invasion by Israel into Gaza, markets are starting to second guess if it will ever happen. This means a very big risk premium needs to be priced out, which could mean more downside risk in the balance for Crude prices.

On the upside, the resistance level near $88 is the first level on the bulls’ radar. From there, the next level will be this year’s high at $94. Should a substantial squeeze unfold, look for $97.11, the high of August 2022.

On the downside, traders are bracing for the entry of that region near $78. The area should see ample support for buying. Any further drops below this level might see a firm nosedive move, which would cause Oil prices to sink below $70.