- Concerns over Middle East supply disruptions fade.
- Expectations of rising US crude production and stockpiles weigh.
WTI (oil futures on NYMEX) took a sharp U-turn from just ahead of the 66 handle and reverted towards the familiar range near 66.30 levels, as the bulls try hard to take on the recovery back above the $ 66.50 barrier.
The black gold ran into fresh offers after the US dollar caught a fresh bid-wave across its main competitors while expectations of a surge in the US shale oil output levels combined with nervousness ahead of the US weekly crude supplies report also weighed negatively on the prices.
However, the bulls quickly regained footing amid potential supply disruption concerns should the US renew the sanctions against Iran. Meanwhile, the political and economic crisis in Venezuela could also keep a check on the country’s oil output levels.
Focus now shifts towards the American Petroleum Institute (API) weekly US crude inventory data due later in the American afternoon for fresh direction on oil prices. In the meantime, markets digest the latest remarks from the International Energy Agency (IEA) Executive Director Faith Birol on the oil markets.
At $ 66.25, the next resistances are aligned at $ 66.84 (5-DMA), $ 67.40 (classic R1/ Fib R1) and $ 68 (round number). To the downside, supports are located at $ 66 (Apr 12 low), $ 65.15 (10-DMA/ Apr 11 low) and 64.50 (psychological levels).
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