- Pil prices gained traction after Pentagon announced that the United States will be deploying military equipment and support personnel to Saudi Arabia.
- However, overall, the price of a barrel oil sank on Thursday, extending last week's losses.
The price of a barrel oil sank on Thursday, extending last week's losses where supply attributed to Saudi output corrected the initial Suadi facility attack spike. West Texas Intermediate crude spot prices slid from a high of $56.84 to a low of $55.45 while the futures for November delivery on Nymex also slid and ended down by 8 cents, or 0.1%, to settle at $56.41 a barrel on the New York Mercantile Exchange - The contract had traded as low as $55.41.
However, later in the session after the close, cash crude oil prices gained traction after the Pentagon announced that the United States will be deploying military equipment and support personnel to Saudi Arabia in response to the drone and missile attacks that targeted Saudi Arabian oil facilities earlier in September.
Reports that Saudi Arabia is ahead of schedule in restoring its output capacity continues to help crude oil prices weaken sharply lower," analysts at TD Securities explained, adding, " In fact, oil prices have now completely filled the gap created by the attacks on Saudi's nerve center, suggesting that the market is no longer discounting any risk premium on oil supply."
WTI prices ranging in the $58-60/bbl region still seem appropriate for now
"We continue to acknowledge that Saudi incentives are aligned to understate the impact of the attacks, but reports of its speedy recovery, when combined with sustained fears of waning demand growth, present a bleak macro picture for crude bulls. The risk of further disruptions may be under priced by market participants who have seemingly taken comfort in their 'show me the lost barrels' framework. Crude oil is not ripe for unconditional love, but we suspect that WTI prices ranging in the $58-60/bbl region still seem appropriate for now."
In today's price action bears closed below the 50-daily moving average and threaten a break below the 200-DMA in the same vicinity to draw in further offers in a run below the trendline support which guards space all the way back to the 54 and then the 52 psychological targets. On the upside, there is some way to go before clearing the 59 handle that will then open prospects for the April highs at 66.58 on the wide.
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