WTI has dropped like a stone on Pompeo 'Iran' comments

Oil prices have dropped like a stone in a flash on today's reports that U.S. Secretary of State Mike Pompeo said Iran is ready to enter negotiations over its missile program. This comes at the same time that the greenback is inching higher on the session following a bid overnight from a touch below the 97 handle, in the case of the DXY (US Retail Sales boost).  

According to The Washington Times, at a Cabinet meeting at the White House, Pompeo said the Iranians have told the U.S. that they are ready to negotiate on their missile program. This follows the fears that the nations supreme Leader had highlighted that the country is further reducing its commitments to the nuclear deal and Khamenei's threat to retaliate against the UK for the seizure of an Iranian oil tanker was keeping prices elevated above $60bbls which have since dropped to a low of $57.14 today from the highs of 60.02.

Indeed, easing tensions between Washington and Tehran will certainly help out the case for lower prices in world oil prices but in the case of the West Texas Intermediate crude, 
expectations that U.S. government data due Wednesday will show a decline in weekly domestic crude stockpiles on the back of storm-related disruptions to output is likely to buffer the downside momentum. Nevertheless, WTI crude for August is poised for the lowest finish on the New York Mercantile Exchange in about a week - it has dropped $1.76, or 3%, to $57.82 a barrel.  However, Hurricane Barry was not as destructive as feared, so the stockpile data may only be a temporary relief for the bulls. The U.S. oil inventories data are due out from the Energy Information Administration on Wednesday and only an unexpectedly sharp decline in crude inventories will likely make a marked impact on prices. 

WTI levels

The price broke the 20-day moving average as well as the confluence of the 50 and 200 moving averages of the same period down at 57.90. A break there opens the weekly lows at 56.77, then the 52 handle and then the 14th Jan 50.41 lows. Further lower, the 26th November lows are located at 49.44 as a target.