Oil prices seeking bullish rebound on supply constraints, WTI eyeing $72.00

Crude oil prices are testing the higher side of recent action as Iranian crude exports continue to decline ahead of the US' November 4th deadline for full-scale sanctions on the Middle Eastern country, with reporting data showing Iranian oil exports have declined by half since earlier this year, and with Saudi Arabia tensions on the rise, barrel costs could rip into multi-year highs as supply and demand continue to race to the bottom.

According to Refinitiv Eikon data, Iranian exports of crude oil have declined to 1.33 million bpd, a sharp contrast to April's 2.5 million bpd, before the US withdrew from the Iranian accord amidst harsh criticism, and US pressure on allies to cease purchases of Iranian-sourced crude appear to be working, dragging oil prices steadily higher on the higher timeframes.

In Saudi Arabia, the potential slaying of a journalist within the Saudi embassy in Turkey is drawing fierce lashback from the global community, prompting threatening Tweets from US President Donald Trump, and Saudi Arabia has doubled down on their stance, threatening to allow the bottom to drop out on Saudi crude production and allowing crude prices to reach $100 per barrel if the US were to take any action. Saudi Arabia, which initially declared they didn't know who the journalist was, has changed their officialy narrative multiple times, claiming that the journalist had left the embassy and then gone missing, and now the Saudi kingdom is stating that the journalist may have been slain in a "botched interrogation", leading the major oil producer head-first into a major political clash, which will bode poorly for oil costs.

The only bearish pressure for WTI rests with US crude supplies, which should a build-up for a fourth straight week, peaking at 1.1 million barrels for the week ended October 12th according to both the American Petroleum Institute and the Energy Information Administration.

WTI levels to watch

Barrels of West Texas light sweet crude are trading back into the 72.00 key level after slipping on Monday into 71.85, and despite last week's sharp decline from the 75.00 region, the long-term trend for crude oil remains firmly bullish, with the H4 chart showing significant support from the 200-period moving average near 71.45, with daily sticks showing growing potential for a bullish launch off of the 50-day moving average at 71.00 while the 200-day moving average remains unchallenged since August's dip into 64.50.