WTI outlook remains volatile on question marks over Saudi production


  • West Texas Intermediate prices were trading -0.22% lower in the Wall Street close.
  • West Texas Intermediate crude for October delivery lost by 4 cents, or 0.07%, to finish at $58.09.
  • Can Saudi production be restored?

West Texas Intermediate prices were trading -0.22% lower in the Wall Street close having edged lower from a high of $59.23 to a low of $59.97 while futures registered a sharp gain for the week, 6% higher and considerably higher on the attacks on Saudi Arabian production facilities last weekend which put into question how much spare capacity there will be left in the oil market leading to the biggest weekly gain in 3 months.

As for futures, West Texas Intermediate crude for October delivery lost by 4 cents, or 0.07%, to finish at $58.09 a barrel on the New York Mercantile Exchange. The contract logged a 5.9% weekly advance, which was the biggest for the U.S. benchmark since the week ended June 21.

Saudis revealed the extent of damages

Oil eased back from the opening highs for the week through the 63 handle on the sentiment that Saudi production would be back to full capacity by the end of this month, according to official announcements made very early on after the first report of the weekend attacks. However, Saudis then revealed the extent of damages and the market now questions how quickly production can, indeed, be restored which will make for a volatile time ahead. 

"In that context, energy market participants are anxiously awaiting an announcement from the Saudis on the geographic location of the cruise missiles launches which targeted the nerve center of the Kingdom's energy complex, along with any details about Pompeo's coalition response, which they hope will be peaceful,"

analysts at TD Securities explained:

"That being said, we think crude oil is not ripe for unconditional love, and suspect that WTI prices ranging in the $58-60/bbl region seem appropriate for now. On the CTA front, trend followers are set to ramp up selling below $59.30/bbl, while in contrast, CTAs could cover shorts above $64.14/bbl."

WTI levels

The price dropped back from the 127.20% Fibonacci extension of the July swing highs to Aug swing lows and remains on the 58 handle, for the most part, rejected on attempts beyond the 59 handle.  A break to the downside will open prospects for the 61.8% Fibo and Aug resistance just below the 57 handle. On a re-escalation of fundamentals, the April highs at 66.58 will be a key target.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD nears weekly highs as risk-on returns

The EUR/USD pair was dragged higher by a soaring Pound, now hovering around 1.1040. The market is all about sentiment, and this last dependent on Brexit and the US-China trade relationship.

 

EUR/USD News

GBP/USD surges to 5-month highs on reports of a draft Brexit deal

GBP/USD has leaped toward 1.28, hitting the highest since May. Reports suggest that the UK and the EU are zooming in on a deal. Details are awaited and negotiations continue.

GBP/USD News

USD/JPY in search of a firm direction, stuck in a range below mid-108.00s

The prevalent risk-on mood weighed on the JPY’s safe-haven status and extended support. A sharp fall in the US bond yields undermined the USD and failed to impress bullish traders.

USD/JPY News

Gold slumps to $1,480 area on Brexit hopes

The troy ounce of the precious metal continued to weaken in USD terms in the American trading hours as markets cheered reports claiming that the European Union (EU) and the United Kingdom (UK) are closing in on a draft Brexit deal that could be announced before the end of the day on Tuesday.

Gold News

Cryptos: Incumbents don't know to play well

The Libra project led by Facebook remains on track despite the first defections. Those who have abandoned the project are mostly payment gateways. Bitcoin's lack of tone weighs on Ethereum's mood.

Read more

Forex MAJORS

Cryptocurrencies

Signatures