Oil: WTI holding steady over 62.00 after slipping on Monday

Middle East tensions help crude bounce back from trade war fears tumble.
American oversupply continues to cap potential gains for oil.

Joshua Gibson FXStreet

Crude oil took a quick dive in Monday's trading to follow equities lower as trade war threats continue to hamper market-wide sentiment. WTI fell to 61.34 yesterday, but has steadily recovered and is now holding just above 62.30.

Trade tensions, excess supply keeping oil down

Trump's tariffs are beginning to spiral out of control, and the impending threat of retaliation from major trading partners is beginning to cast a pallor over risk-based assets including oil, but WTI was bolstered higher following yesterday's tumble as demand continues to strengthen, as well as ongoing tensions between Saudi Arabia and Iran, with Saudi Arabia reiterating on Friday that they would push to develop nuclear weapons if Iran does so as well.

Oversupply continues to cap oil gains looking into the future, as the US reopened drilling rigs that were closed recently, and the glut of American oil continues to power through the OPEC's attempt to curb supply in the global markets.

WTI Levels to watch

WTI crude remains capped under a declining trendline, and resistance is piling up from March's high of 63.25 and February's swing high of 64.21, while support is holding steady from the 60.00 major psychological level and February's low of 58.11.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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