WTI unable to sustain the $57 handle in Asia, eyes on 23.6% Fibo support
- West Texas Intermediate crude unable to sustain the upside despite API.
- A break of the 23.6% retracement just below today's lows opens risk to the 61.8% Fibo at 55.70.
West Texas Intermediate crude has travelled -0.52% in Asia, despite a drop in crude supplies according to the American Petroleum Institute. This has left the price of WTI off its overnight advance where a high of $57.44 was printed on the data. Instead, bears have piled in on a spot basis after the front-month September delivery rose 55 cents, or 1%, on the New York Mercantile Exchange to settle at $56.77 a barrel.
On the geopolitical front, Iran noise and trade negotiations between the US and China back underway helped to lift prices, but the move has not been sustained. Overnight, there were wires related to the Strait of Hormuz and Britain seeking a unified effort between European nations such as France, Denmark, Italy and the Netherlands as well as from Germany, Spain, Sweden and Norway for a safe-shipping passage in the Straight of Hormuz. However, in recent trade, Reuters reported that Iran smashed the UK’s effort to gather support for the European naval mission. The news report quotes updates from IRNA on the Iranian Deputy Foreign Minister Abbas Araqchi’s visit to Paris where he said that Iran will secure the Strait of Hormuz and not allow any disturbance in shipping in the key oil transport waterway.
Meanwhile, the American Petroleum Institute reported late Tuesday that U.S. crude supplies dropped by 11 million barrels for the week ended July 19. Investors are more inclined to see what comes from the inventory data from the Energy Information Administration later today. This data is expected to show crude inventories falling by 4.4 million barrels last week.
WTI levels
On a continuation of the upside, bulls can target the 20-week moving average at 57.78. However, with prices struggling through 57 the figure, a break of the 23.6% retracement just below today's lows opens risk to the 61.8% Fibo at 55.70. A full-on break to the downside will reveal the 200-week moving average at 52.78. However, on a continued break to the upside, 57.40 and the accumulation of daily 20, 50 and 200 moving averages opens the said 20-week moving average ahead of the 60 handle and double top in the 60.80s.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
