- Iran closes the door for talks with the US.
- Doubts over Iranian oil exports due to geopolitical tension and uncertainty concerning the US-China trade deal seems to have activated the profit-booking wave.
- API crude inventory data on the radar for fresh impulse.
With not so clear details on how the US-Iran tensions have affected the OPEC member’s oil output, WTI traders emphasized more on the uncertainty surrounding the US-China trade deal and recently weak US manufacturing data to trigger the energy benchmark’s pullback moves to $57.35 heading into the Europe market’s open on Tuesday.
Although the Iranian Energy Minister Bijan Zanganeh denied reports of any fall in the nation’s oil exports, Reuters cited industry sources to convey that there was nearly a decline of 300,000 barrels per day into the level so far during June.
On the other hand, the US and Chinese sources were all on wires during early Asia conveying the likeliness of the Trump-Xi meeting at the sidelines of the G20. Though, no media reports favored expectations of a positive outcome from either the US President Donald Trump or his Chinese counterpart Xi Jinping.
Recent disappointment from the US Dallas Fed Manufacturing Index could also be cited as a second-tier contributor to the black gold’s decline.
Moving on, weekly announcement the American Petroleum Institute’s (API) US oil stocks could offer immediate guidance to the price sentiment. The inventory level was last dropped by -0.812 million barrels. It should also be noted that today's meeting by the Organization of Petroleum Exporting Countries (OPEC) is less likely to deliver any meaningful results as the key gathering with other allies like Russia, popularly known as OPEC+, will be held during early July.
Technical Analysis
FXStreet Analyst Ross J Burland continues to emphasis on 200-D EMA as the key upside resistance as he says:
WTI has bowed out of an advance towards the 200-D EMA. Overnight trade had the pair capped at the weekly 20-Experiential Moving Average and moving below the 4HR 200 EMA. Bears can target back down to the 200 weekly EMA (last week's low) and the 61.8% Fibo. Should this give out, then there will be prospects for a correction to back towards the 14th Jan 50.41 low and then the 26th November lows at 49.44. On a correction, a break above the 200-D EMA opens the 30th May highs at $59.67 to put the bulls back on course for the $60 psychological level.
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