Crude Rallies Despite Potential Fall Off The "Fiscal Cliff"Options Xpressupdated Dec 28, 2012TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.Friday, December 28, 2012 Increased volatility may be in the cards for Oil prices in the coming days, as traders deal with geopolitical issues in the Middle East and concerns of an economic slowdown in the US during a period of lighter than normal holiday trade.Fundamentals The rally in Crude Oil futures prices continues, despite concerns that little progress is being made in Washington to avert the so called "Fiscal Cliff". Front month futures have recently traded to highs not seen in nearly 2 months, after the announcement of arrests of individuals in the United Arab Emirates in an alleged terror plot. This news seemed to cause an increase in the "risk premium" seen in Oil prices, due to the heightened potential of supply disruptions out of the Middle East. However, with little new information forthcoming on the terror plot, some traders may start to turn their focus to the potential impact on Oil demand should the US experience rising tax rates and forced spending cuts if US political leaders fail to come up with an agreement. This may cause a lightening-up of long positions going into the New Year. Due to the Christmas Holiday earlier in the week, the weekly EIA energy stocks report will be released later this morning (11:00 AM EST), which is 2 days later than normal. Analysts' estimates are for a draw of 1.7 million barrels of Crude last week, with refining operating rates expected to have fallen by 0.1% to 91.4%. Any major deviation from these figures could generate an oversized move in Crude prices, as lower liquidity due to light holiday trade may exacerbate market volatility.Technical Notes Looking at the daily chart for February Crude, we notice prices once again trading above $90 per barrel highs not seen since mid-October. The recent rally sent prices above the 20-day moving average ("MA"), but still nearly $3 below the widely watched 200-day MA. We also have what might be a rounded-bottom formation on the daily chart, which if true, could set the stage for potentially higher prices going into 2013. The 14-day RSI is positive, with a current reading of 59.28. The October 22nd high of 92.17 looks to be resistance for February Crude, with support seen at the 20-day MA, currently near 88.37. Mike Zarembski, Senior Commodity AnalystEditorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.