WTI firmer above $56 as US-Iran tensions flare up, US rigs data eyed
|- Oil lifted by fresh US-Iran geopolitical worries, but bulls lack follow-through.
- Stronger USD, bearish IEA headlines and US stocks surge cap oil's rally.
- Investors' attention turns to US rig count and consumer sentiment data for fresh directives.
WTI (futures on Nymex) is seen consolidating its recovery from monthly lows of 54.75; the bulls take a breather amid resurgent US dollar demand and nervousness ahead of the US drilling sector activity data.
The black gold jumped over 1.50% this Friday, mainly driven by renewed tensions between the US and Iran after the US President Trump said that the US Navy ship “destroyed” an Iranian drone in the Strait of Hormuz. However, the tensions flared up after the Iranian officials denied any such shooting down of Iran’s drone, saying that all drones have returned to their base.
The bulls lacked the vigor to extend the upside, as investors continued to weigh in the recent comments by the International Energy Agency (IEA) Chief Birol. Birol said the IEA is revising down the 2019 global oil demand growth forecast, in light of slowing global economy, especially China.
Moreover, broad-based US dollar recovery, as well as swelling US fuel stockpiles, keep the sentiment undermined around the commodity. Attention now turns towards the US UoM Consumer Sentiment and rig count data due later today for near-term trading opportunities.
WTI levels to watch
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