Crude oil WTI taking its cues from US sanctions on Russia and Iran
|Syria-related news mainly priced in by the market according to analysts.
Investors are shifting their focus to the US which is planning to impose sanctions on both Russia and Iran.
Crude oil prices have mainly been correcting down and now stabilizing at $66.50 per barrel (WTI benchmark) down 1.16% on Monday as the US airstrike was mainly priced in by the market.
The market is now shifting its attention to the US sanctions on Russia and to Iran. President Trump repeatedly said that he was planning to pull out of the Iranian deal and impose fresh new sanctions on Iran.
On Sunday, Nikki Haley, the US Ambassador to the UN, said the US would announce the third round of sanctions against Russia on Monday.
“Secretary Mnuchin will be announcing those on Monday if he hasn't already and they will go directly to any sort of companies that were dealing with equipment related to Assad and chemical weapons use. And so I think everyone is going to feel it at this point. I think everyone knows that we sent a strong message and our hope is that they listen to it.” said Haley on CBS ‘Face the Nation’ on April 15.
It is still unclear how the oil market is going to react to the Russian sanctions and it may be that any Syria-related news might be priced-in at this stage. "I would not be surprised to see the oil price sliding given the fact that it has been priced in already," said Eugen Weinberg, head of commodity research at Commerzbank.
Meanwhile, last Friday Baker Huges data showed that the US added 7 more rigs in the week to April 13, bringing it to 815 from 808 in the previous week. This is the second consecutive week where drilling rigs weere added while it is 132 more than one year ago at the same time of the year.
Crude oil 4-hour chart
Crude oil is correcting down from the high made at 67.74 on April 13th. Immediate supports are seen at 66.55 swing low and then at 65.42 swing high. Immediate resistance is seen at 66.97 intraday swing high followed by the 67.74 level, a cyclical high.
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