- WTI previously dropped amid rising USD and comments from the US lawmakers to placate Iran.
- Short covering activates on Iran rejecting the US suggestion to negotiate its missile program.
- EIA data, trade/political news in the spotlight.
With Iran pouring cold water on the face of the US efforts to find peace, WTI witnesses short covering moves to $57.60 amid initial Asian session on Wednesday.
The energy benchmark previously declined after the US Secretary of State Mike Pompeo said that Iran had "for the first time" shown its willingness to discuss its missile program. The US lawmaker’s statements came after Iran’s Foreign Minister Mohammad Javad Zarif’s comments showing readiness for discussions with the US, provided the removal of sanctions.
Adding to the price slump was the improvement in weekly inventory levels revealed by the American Petroleum Institute (API) that recovered to -1.401 million barrels versus the previous decline of -8.129 million barrels.
Furthermore, market support for the US Dollar (USD), on the back upbeat data, coupled with the on-going US-China trade tussle also pleased bears.
Recently, the BBC released a news report quoting a spokesman for Iran’s UN Mission, Alireza Miryousefi, that the nation rejects the US suggestion concerning its missile program’s negotiable status.
Energy buyers took advantage of the recent price slump to trade the news and triggered the black gold’s U-turn towards confronting 200-day simple moving average (200-DMA) following its slip beneath the key moving average (MA) during the previous day.
In addition to following the trade/political news, investors will also keep an eye over the Energy Information Administration’s (EIA) US Crude Oil Stocks Change for the week ended on July 12. The forecast suggests -3.375 million barrels of stockpile versus -9.499 million barrels prior.
Technical Analysis
Not only 200-DMA level of $58.00 but 100-DMA level of $59.30, followed by $60.00, could also challenge oil buyers, which in turn highlights the importance of current month low around $56.00, a break of which can fetch the quote to early-June top surrounding $54.80.
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