WTI on the defensive near $ 67.50 amid Emerging Markets turmoil

WTI (oil futures on NYMEX) stalled is gradual decline near $ 67.30 in the European session and regained the 67.50 barrier, although trades cautiously amid ongoing trade and geopolitical tensions.

The fears of Turkish contagion have negatively affected the demand outlook for fuel from the Emerging Markets, eventually weighing on the sentiment around the black gold.   The EM currencies have come under pressure after the Lira lost almost 25% of its value against the greenback on Turkey’s economic crisis.

However, the bulls continues to derive support from expectations that the US sanctions on Iran could tighten global supplies. Iran is the OPEC’s no. 3 oil producer.

Looking ahead, it remains to be seen if the barrel of WTI manages to hold the downside, especially after hedge funds and other money managers reduced their bullish positions in US crude futures and options in the week ending on Aug. 7, the latest CFTC data showed on Friday.

Also, markets eagerly await the US fuel inventories data that will be reported on Tuesday and Wednesday for fresh momentum on the prices.

WTI Technical Levels

According to Omkar Godbole, Analyst at FXStreet, “Oil is more likely to fall back below Friday's low of $66.18 and extend losses towards the 200-day MA over the next few days. The long-term MA is currently located at $64.49. A move above the falling channel hurdle would abort the bearish view. A daily close above $70.41 (July 30 high) would confirm a bear-to-bull trend change.”