- Prices of WTI extend the rally to levels above $59.00.
- The API reported a 7.77M barrels drop in US crude supplies.
- The weekly report by the EIA is coming up next.
The rally in crude prices remains everything but abated so far today, lifting the barrel of the American reference for the sweet light crude oil to fresh tops in the area beyond the $59.00 mark.
WTI now looks to EIA report
The relentless up move in prices of the West Texas Intermediate gathered extra wings today after the American Petroleum Institute (API) reported late on Tuesday a reduction of 7.55M barrel in US crude oil supplies during last week.
In addition, prices met extra oxygen after the White House recently announced new sanctions against Iran, aggravating the situation of the oil industry in the OPEC member.
Also collaborating with the up move in prices, somewhat diminshing concerns on the US-China trade conflict have given extra support to the risk-complex. In this regard, the upcoming G-20 event has gained further relevance on the back of the probable Trump-Xi meeting.
Moving forward, the EIA will publish its weekly report on US crude oil inventories ahead of Friday’s oil rig count by driller Baker Hughes.
What to look for around WTI
Geopolitical jitters around the US and Iran remain nonstop for the time being and keep sustaining the upside momentum in crude oil prices. In fact, tensions between both countries are seen escalating in the very near term following the new round of US sanctions, targeting both country and officials and including the Supreme Leader Ali Khamenei. The potential meeting between Trump and China’s Xi at the G-20 event could lend extra legs to the rally if some progress on the trade front is signalled. Also bolstering the upbeat sentiment among traders are the tight US market, the OPEC+ agreement to curb oil production and the so-called ‘Saudi put’.
WTI significant levels
At the moment the barrel of WTI is advancing 0.92% at $59.10 and a breakout of $59.48 (55-day SMA) would aim for $60.73 (23.6% Fibo of the December-April rally) and finally $63.79 (monthly high May 20). On the flip side, the next down barrier arises at $57.19 (38.2% Fibo of the December-April rally) seconded by $54.50 (21-day SMA) and finally $50.54 (monthly low Jun.5).
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