Investing.com – The recent fluctuations in oil prices have highlighted the volatile nature of the market, particularly in response to news regarding the Middle East crisis. While there may be moments of relative calm, it is uncertain how long they will last before the next escalation sends traders into a frenzy. It is important to consider whether the war risk premium for crude prices is justified, given that no significant amount of oil has been lost during the Israel-Hamas conflict. Unlike gold or the dollar, the value of oil is derived from demand-related consumption. Some argue that the proximity of the conflict to major oil producers such as Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait justifies higher crude prices. However, it is important to note that Israel and Gaza have minimal impact on the global oil trade. The key chokepoint for oil movement, the Strait of Hormuz, is located between them and handles a fifth of all oil shipments. Concerns about Iran, the fifth largest oil producer, and potential reprisals from Israel and the United States further contribute to market uncertainty. Nonetheless, some oil traders view the conflict as a major political event rather than a significant risk to the crude trade. This perspective explains the modest pullback in crude prices after the release of two prisoners held by Hamas. However, it is crucial to maintain perspective. The release of these prisoners is a small gesture compared to the number of Israeli hostages still held by Hamas and other armed groups. It is unlikely to halt Israel’s mission to eliminate the militant organization. While there is a possibility of regional contagion from the conflict, it is a stretch to maintain a high risk premium on oil without a commensurate impact on the trade. The prices of fuel at US pumps reflect this sentiment, as they have fallen in recent weeks due to adequate supply and narrowing refining margins. In terms of market settlements and activity, New York-traded crude for delivery in December settled at $88.08, down 0.3% on Friday. The global crude benchmark in London settled at $92.16, down 0.2%. Looking at the technical outlook for WTI oil, immediate support is at $87.25, while resistance stands at $89.85. In the gold market, the metal reached $2,000 for the first time since August, driven by uncertainty surrounding the Middle East crisis and the Federal Reserve’s decision not to raise interest rates. Gold’s safe haven status has been reaffirmed, and its appeal is further enhanced by rising US yields and geopolitical and economic uncertainty. The most-active contract on New York’s Comex settled at $1,994.40, up 0.7% on Friday. The spot price settled at $1,981.64, up 0.4%. Looking ahead, immediate support for gold is at $1,974, while resistance is at $1,985. Finally, natural gas prices have returned to the $2 mark after a period of struggle. The prospects for gas have weakened due to a larger-than-expected increase in supply. The price outlook for natural gas is influenced by resistance at the 50-week EMA, with immediate support at $2.87 and resistance at $3.01. A sustained break above $3.01 could lead to a bullish rebound, while a break below $2.87 could result in a drop to $2.66.