WTI scales 7-week highs near $ 61 amid supply disruption risks
- Rallies on Gulf of Mexico storm, weaker US dollar and the Middle East tensions.
- Bullish EIA report supports, as focus remains on trade/ geopolitical developments.
WTI (futures on Nymex) extended its winning streak into a third day today and reached the highest levels in seven weeks at 60.93 levels, largely on the back of mounting crude supply disruption risks emanating from a storm built in the Gulf of Mexico.
In a safety bid, fifteen production platforms and four rigs were evacuated in the north-central Gulf of Mexico while the US oil producers cut nearly a third of Gulf of Mexico crude output, in light of the storm that is expected to become a hurricane by Friday.
Moreover, the black gold also finds support from escalating Middle East tensions after five Iranian boats approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, as cited by Reuters. Furthermore, declining US crude stockpiles also collaborate with the upbeat tone around the barrel of WTI.
The latest data by the Energy Information Administration (EIA) showed that the US crude stocks fell 9.5 million barrels in the week to July 5 when compared to the 3.1 million-barrel draw expected.
Additionally, the ongoing weakness in the US dollar across the board amid falling treasury yields on dovish Fed Chair Powell’s Congressional testimony also helps the oil bulls. A weaker US dollar makes the USD-denominated oil cheaper for foreign buyers.
Markets continue to watch out for the further developments around the US-China trade negotiations and the Middle East for fresh trading impetus ahead of Friday’s US rigs count data.
Levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
