- WTI recovers from eight-day low as headlines from UNGA portray continuation of the US-Iran tension.
- API registered higher inventories, fresh doubts emerge over the US-China trade deal.
- EIA stockpile report and trade/political headlines will be in the spotlight.
With the fresh headlines from the UNGA shifting market attention back to US-Iran tension, WTI recovers from eight-day low while taking the bids to $57.15 amid initial trading session on Wednesday.
The energy benchmark took a U-turn during early Asian session after Iran’s President Hassan Rouhani cornered the French President Emmanuel Macron’s efforts to arrange a meeting with the US leader Donald Trump. The Iranian President said that the meeting would have to be planned because the US President Trump has removed trust while exiting the Nuclear Deal.
The black gold earlier witnessed extended downside pressure after the the private oil inventory survey of the American Petroleum Institute (API) showed that the US Crude Oil Stock rose to 1.400M versus 0.592M prior during the week ended on September 20.
Energy traders shrugged off the latest worries concerning China’s economic growth while also ignoring comments from the dragon nation’s Foreign Minister Wang Yi that may cause harm to already dwindling relations between the US and China.
Looking forward, trade/political headlines will keep dominating market sentiment whereas weekly official stockpile data from the US Energy Information Administration (EIA) for the week ended on September 20 will be followed as well. Forecast suggests the official inventories to diverge from API data while likely flashing -6.501M mark against 1.058M prior. It should also be noted that Saudi Aramco’s release of information on expected timeline of repairs after the latest drone attack can also offer intermediate direction to energy prices.
Technical Analysis
FXStreet Analyst Ross J Burland holds bearish bias towards the WTI momentum as he says:
Repeated failures on the 58 handle for higher levels has lead to the deterioration in the price all the way back to the 61.8% Fibo and August resistance just below the 57 handle. For now, the 50 and 200 daily moving averages are holding up. and offering support. On the upside, a clearing of the 59 handle will ope prospects for the April highs at 66.58 on the wide.
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