WTI dropped 6% on the day as Saudi oil supply meets demand

WTI drops to the lowest levels of the day following the Saudi energy Minister's bullish statement.
WTI has dropped to a low of $58.54, travelling down from a high of $62.55 and down some 6% on the day.

Ross J Burland FXStreet

The price of a barrel of oil has just hit the lowest levels since the week's attack on Saudi oil facilities following bullish remarks from the Saudi Energy Minister. WTI has dropped to a low of $58.54, travelling down from a high of $62.55 and down some 5% on the day at its lowest levels.

Speculators took profits at the highs yesterday considering there were no immediate escalations on the geopolitical front until the U.S administration claimed to have intelligence that Iran was indeed responsible for the attacks, but an outright military retaliation seems to have been averted and instead, the US will not seek war on Iran but will impose sanctions.

Saudi Energy Minister has said that supply is fully back online

The price of oil found further relief on the statement from the Saudi Energy Minister has said that supply is fully back online while production will be fully back online by the end of September.

Saudi energy minister: Oil supply is fully back online

"We acknowledge that OPEC nations, and particularly Saudi Arabia, have a direct incentive to downplay the impact of the disruption, as each individual nation would benefit from disincentivizing others' production," analysts at TD Securities had to say on the matter at the start of the week.

WTI levels

The market bounced hard on the fundamental weekend news which has thrown technicals off, but with the fundamentals now calming, technicals can come back into play and the downside is in play. The price surged to the vicinity of a 127.20% Fibonacci extension of the July swing highs to Aug swing lows but has since moved back, swiftly, to the 78.6% Fibo of the same range and prior Sep' highs in the 58.50/70s. A break below there will open the 61.8% Fibo and Aug resistance just below the 57 handle. On a re-escalation of fundamentals, the April highs at 66.58 will b back in vouge.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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