- WTI fall short of portraying political tension surrounding Iran amid lack of fresh news from trade front, Japan off and lack of data/events.
- The US advisor John Bolton reaches the UK, Iran warns of war in the Gulf.
With the Japanese markets off and no major data/events scheduled for publishing from rest of the world, WTI prices fail to extend the previous run-up while trading near $54.25 heading into the European traders’ return from the weekend on Monday.
The price positive aspects are latest comments from Iran’s Revolutionary Guard’s navy Commander Alireza Tangsiri who warned of war if Israel marks a presence in the Persian Gulf. The statement rolled out after Israel said to support the US in safeguarding the global oil transit in the Gulf of Hormuz.
Adding to the political pessimism is the likely push by the US National Security Adviser John Bolton to the UK during his visit. The Trump administration has been against Iran and the UK has recently supported its proposal to join hands for safe oil transit in the Persian Gulf. However, Mr. Bolton is rumored to ask for increased security measures in the sea, in addition to further hardships for China’s Huawei, in his visit.
Also, declining European inventories and extended production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, please the energy bulls.
On the contrary, the US-China stalemate isn’t much entertaining unless anything erupts from the official sources, which has been absent during the Asian session. Furthermore, no data and off at Japanese markets add dormancy.
Technical Analysis
FXStreet Analyst Ross J Burland spots the black gold’s inability to cross the 50 and 200-day moving averages while expecting further weakness:
The price of oil started to recover towards the end of the week, but, technically, the price is still underwater despite a break back above the 61.8%% Fibo of the late Dec to 2019 range. Bulls have taken back the 50% Fibo of the same range, but until there us a tet and hold above the 50 and 200 daily moving averages, bears remain in charge. The Bears can target below the 50 handle on an escalation of the trade wars – 47.56 comes in as the 78.6% Fibo. Bulls can target the 20-day moving average at 55.50 and then a run towards 56.80 and then 60.50.
Share
