- Fresh US dollar selling prompts a bounce in oil prices, as WTI eyes $ 69.50.
- Awaits American Petroleum Institute (API) weekly fuel stocks data.
WTI (oil futures on NYMEX) stalled its corrective move lower near $ 68.65 region, as the bulls fought back control and prompted a tepid bounce, in an effort to regain the 69 handle.
The renewed uptick in the barrel of WTI is directly related to a fresh bout of selling seen in the US dollar across its main competitors, with the US dollar index refreshing three-week lows at 94.64.
Further, supply risks emerging from Venezuela Africa and Iran also offer support the prices. According to the latest International Energy Agency (IEA) data released on Monday, Venezuelan crude oil exports had halved in the previous two years to just 1 million bpd by mid-2018.
However, ongoing US-China trade spat combined with the renewed risks of rising OPEC output could keep a check on the upside. “The monitoring committee of the Organization of the Petroleum Exporting Countries (OPEC) found that oil producers participating in a supply-reduction agreement, which includes non-OPEC member Russia, cut output in July by 9 percent more than called for,”
Attention now turns towards the weekly US API crude inventory data due to be reported at 2030 GMT for fresh direction on the prices.
WTI Technical Levels
Slobodan Drvenica at Windsor Brokers notes: “Bullish techs (momentum broke into positive territory and continues to head up and daily MA’s in bullish setup) support the advance, but overbought slow stochastic warns of consolidative / corrective action before final attack at thinning daily cloud (69.46/70.05). Broken Fibo barrier at $68.60 now acts as initial support, ahead of 30SMA ($67.86) and 20SMA ($67.40) which is expected to hold deeper dips.
Focus turns on releases of US crude stocks report, with private institute (API) due later today and official data (EIA) due on Wednesday, which could provide fresh signals. Res: 69.29; 69.46; 59.89; 70.05. Sup: 68.60; 68.33; 67.86; 67.40.”
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