WTI remains under pressure near the $56.00 mark/bbl

  • WTI trades directionless near the $56.00 handle.
  • The barrel of WTI trades in the area of 2-week lows.
  • EIA reported a 3.1M barrel draw last week.

Crude oil prices are looking for direction so far this week, with the barrel of West Texas Intermediate hovering around the $56.00 mark, challenging at the same time 3-week lows.

WTI fades the initial uptick above $57.00

Prices of the American benchmark for the sweet light crude oil attempted a move beyond the $57.00 mark earlier in the day following news that Iran has seized a foreign oil tanker in the Persian Gulf.

In the meantime, rumours that Iran and the US could go back to the negotiations table have removed some tension in the Middle East and put crude oil prices under some downside pressure as of late.

Also weighing on crude prices, the EIA reported on Wednesday a 3.1M barrel draw during last week, coming in short of expectations despite it was the fifth consecutive drop in US supplies.

Looking ahead, driller Baker Hughes will publish its weekly report on US drilling activity on Friday.

What to look for around WTI

The weekly sell-off in crude oil prices showed some decent contention emerged around the $56.00 mark per barrel. Diminishing US-Iran tensions have been collaborating with shrinking prices, although there is still no move from any of the countries to start talks. On the positive side for oil prices, the recent extension of the OPEC+ deal to curb output until the end of Q1 2020 should provide some support in case sellers regain the upper hand along with tight US oil markets and the so-called ‘Saudi put’.

WTI significant levels

At the moment the barrel of WTI is gaining 0.18% at $56.69 and a surpass of $57.45 (200-day SMA) would aim for $59.16 (100-day SMA) and then $60.86 (monthly high Jul.15). On the downside, immediate contention emerges at $56.23 (low Jul.17) seconded by $55.91 (monthly low Jul.3) and finally $50.54 (monthly low Jun.5).

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