- Rebound stalls as King Dollar rules amid trade tensions.
- Iran sanctions, upbeat IEA demand forecasts keep the downside capped.
- Focus shifts to US drilling report and CPI figures for fresh momentum.
WTI (oil futures on NYMEX) extended its bearish momentum and hit a two-month lows of $ 66.16 at the European open before finding buyers to take on the recovery back towards the $ 67 mark.
Despite the recovery, the bulls failed to regain the 67 handle, as persisting risk-off moods across the European markets, triggered by ongoing trade tensions and Turkey’s economic crisis, continues to weigh negatively on the higher-yielding oil.
More so, amid a slump in the Emerging Market (EM) currencies, the Lira, Ruble, Yuan and Indian Rupee, markets continue to renew their confidence in the US dollar, collaborating the bearish bias seen in the USD-sensitive commodity.
However, the downside was cushioned by the expectations of a tighter global market after the latest US sanction on Iran. Iran is the OPEC’s no. 3 oil producer. Further, upbeat global demand forecast for the next, as published by the IEA in its latest monthly outlook report, also offered some support to the barrel of WTI.
In the day ahead, the US inflation data and drilling sector activity report will help decide the next direction on the prices.
WTI Technical Levels
According to the Swissquote Research Team, “long positions above 66.50 with targets at 67.15 & 67.40 in extension. Below 66.50 look for further downside with 66.10 & 65.75 as targets. The RSI is mixed with a bullish bias.”
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