WTI: US-Iran story battles EIA, OPEC+ negatives below $43.00

WTI refreshes intraday low to $42.90 during the early Asian session on Thursday. The energy benchmark recently came under pressure as the global oil cartel showed worries concerning the demand while weekly stockpiles also depleted lesser than expected. In doing so, the quote disrespects the headlines suggesting the US intention to renew an arms embargo on Iran.

No takers for geopolitics…

Although the tension between Washington and Tehran was once considered as a major reason for oil prices run-up, these are not the days that respect any such news. This becomes clear after the commodity prices ignored American intention to renew almost all sanctions on Iran. Not only US President Donald Trump’s clear threat to the Arab nation, but Secretary of State Mike Pompeo also warned Russia and China to not meddle as they did in the recent past. While the news should have increased the energy prices due to geopolitical tension concerning the major producer Iran, the anticipated tussle with Moscow and Beijing seems to have stopped the bulls.

Earlier, the OPEC+ Joint Ministerial Monitoring Committee (JMMC) concluded that “the pace of recovery appeared to be slower than anticipated.” The Organization of the Petroleum Exporting Countries and allies such as Russia, a group called OPEC+, reviewed compliance with oil cuts meant to support oil prices amid the coronavirus (COVID-19) pandemic. While the oil majors were not expected to offer any output decision, a downbeat tone weighed on the energy prices.

Additionally, the Energy Information Administration (EIA) revealed in its Weekly report that Crude Oil Stocks Change in the US was -1.6 million barrels, versus -2.7M forecast and -4.5M prior, in the week ending August 14^th.

It should also be noted that the US dollar’s bounce off 27 months and 0.30% loss of S&P 500 Futures become an additional reason for the oil traders to remain cautious.

Looking forward, an empty economic calendar in Asian keeps risk catalysts on the driver’s seat and will highlight Tehran’s reaction. Following that, the US Jobless Claims and Philadelphia Fed Manufacturing Survey results may entertain the market players.

Technical analysis

A two-week-old rising wedge formation joins multiple failures to refresh the monthly top while keeping the bears hopeful. Though, a clear break below $42.40 becomes necessary to witness the black gold’s notable downside.