WTI shows little reaction to latest news from the Middle East
|- WTI fails to hold on to recovery gains amid mixed headlines from the Arab world.
- Kuwait-Iran diplomats talk to de-escalate regional tension, Saudi-led coalition strikes Yemen.
- Baker Hughes Rig Counts to occupy economic calendar while trade/political news will be the key to watch for fresh impulse.
Despite witnessing some key headlines from Iran and Saudi Arabia, WTI fails to register much momentum as it trades around $58.70 amid initial Asian session on Friday.
While doubts surrounding any breakthrough from the US-China trade meeting in October seem to weigh on the energy benchmark, news that Foreign Ministers of Kuwait and Iran discussed ways to de-escalate tension in the Middle East region should have exerted additional downside pressure on the prices.
On the contrary, headlines from the Saudi State TV spotting military operation by the Saudi-led alliance in the north of Hodeidah in Yemen indicate a further recovery in the black gold.
Although geopolitical headlines concerning the Middle East will be the key to forecast near-term WTI moves, investors will also follow numbers from the Baker Hughes’ weekly US Oil Rig Count that stood at 733 during the last readout.
It should also be noted that while recently erupted political tension signal WTI upside, trade pessimism and increase in inventory numbers from the American Petroleum Institute (API) and the Energy Information Administration (EIA) might exert downside pressure on the quote.
Technical Analysis
Not only $60.00 round-figure but July high surrounding $61.00 and recent tops near $63.15 are likely key upside barriers for the energy benchmark. Meanwhile, 200-day exponential moving average (EMA) level of $57.90 seems crucial support to watch as it holds the gate to further declines towards six-week-old rising trend-line around $54.50.
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