- WTI is trading on the backfoot on broad-based dollar strength.
- Technically, the charts lean heavily to the downside with RSI turning sharply lower with bears eyeing a run to the 200-4hr SMA at 68.20.
WTI is trading on the backfoot on broad-based dollar strength and as a report showing the biggest weekly drop in domestic crude supplies in nearly two years failed to diminish concerns over a potential rise in Libyan oil exports and heightened risk from the U.S.-China trade spat.
In recent trade the US dollar has taken off, spiking in a range between 94.0910-94.7230 ahead of tomorrow's UC CPI data and after a series of positives for the greenback from today's session so far. We had hawkish comments from Fed's Evans, impressive US wholesale data and PPI and a continued flight to the dollar as EMs contract.
Reports that Libyan crude will be back online and possible waivers for U.S. sanctions on Iranian oil
At the same time, there were some initial profits taken of the tops today on back of reports that Libyan crude will be back online and possible waivers for U.S. sanctions on Iranian oil. Eyes now turn to how U.S. President Donald Trump will deal with Russia over raising oil production.
The losses come even after the biggest draw since September 2016 as the Energy Information Administration reported Wednesday that domestic crude supplies plunged by 12.6 million barrels for the week ended July 6.
At the moment the barrel of WTI is down at 69.15, penetrating the 6th July support at 70.66 and below the 21-D SMA at 69.42 and just recently, the 50-D SMA at 69.03. On the flipside, the 10-D SMA is located at 72.26 ahead of 73.36 as the 9th July high on the way to 75.34 (2018 high Jul.4) and 77.95 (high Nov.21 2014). On the wide, 79.92 comes as the high for Nov.8 2014. However, technically, the charts lean heavily to the downside with RSI turning sharply lower with bears eyeing a run to the 200-4hr SMA at 68.20.
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