WTI firmer in Asia, adding 0.6% on Iran noise

Oil prices ended the day on Friday at $55.78bbls having travelled between a range of $55.00 and $55.78. Increased tensions in the Middle East gave way to notable declines earlier in the week and the price fell from $60.82 to $54.73 the low for the week where prices were reacting to the weakness in U.S. equities as well. 

The Pentagon, on Friday, announced and confirmed that a UK tanker, The Stena Impero,  was taken by Iran, another seizure that follows a constant threat of escalating tensions between Tehran-Washington and allies. Tehran said the vessel was "violating international maritime rules". The recent Middle East conflict come amid reports of a stronger rhetoric between Iran and the U.S. officials with tensions between the countries providing support for energy prices.

Iran's ambassador to London, Hamid Baeidinejad, has urged the UK government to contain political forces seeking to turn the dispute into something larger. "UK government should contain those domestic political forces who want to escalate existing tension between Iran and the UK well beyond the issue of ships," Baeidinejad said on Twitter Sunday. "This is quite dangerous and unwise at a sensitive time in the region." According to CNN, the UK has convened two emergency meetings of national security officials to discuss its response, while also consulting other countries. It has warned ships connected to the UK shipping industry to "stay out of the area" in the interim.

WTI levels

As for technicals, on the upside, 57.40 comes in as a key area with the confluence of prior support and an accumulation of daily 20, 50 and 200 moving averages ahead of the 20-week moving average. Thereafter, bulls will look to the 60 handle and double top in the 60.80s. However, on the downside, with the price stuck below the 20-week moving average at 57.67, bears have eyes on the 200-week moving average down at 52.70. Thereafter, we have the 14th Jan 50.41 lows ahead of the 26th November lows which are located at 49.44.