WTI drops 1% to test $ 71 mark ahead of API data

Expectations of higher US fuel stocks, better bid US dollar drag oil prices lower.
Will the downside sustain, as RSI shows upside momentum?

Dhwani Mehta FXStreet

WTI (oil futures on NYMEX) reversed the overnight recovery and now re-tests the 71.00 support area, as markets remain unnerved amid expectations of an increase in the US crude inventories.

According to a Reuters poll conducted ahead of the American Petroleum Institute (API) US crude stockpiles data release, showed that the US crude stocks are expected to rise last week for the fourth straight week, by about 1.1 million barrels.

Additionally, broad-based US dollar pullback amid escalating geopolitical and trade tensions also collaborate to the latest leg down in the black gold.

However, the losses could be limited by the looming supply risks from the US sanctions on Iran´s oil sector, effective Nov, 4. The US special envoy for Iran said on Monday that the United States is still aiming to cut Iran’s oil sales to zero, Reuters reports.

All eyes now remain on the US weekly fuel stocks data due to be published by the API later on Tuesday at 2030 GMT for further trading impetus.

WTI Technical Levels

According to Swissquote Bank Research Team, “Long positions above 71.30 with targets at 72.70 & 73.20 in extension. Below 71.30 look for further downside with 70.85 & 70.50 as targets. The RSI shows upside momentum.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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