- Global trade war fears negate supply risks from Iran, Venezuela.
- Sold-off into fresh US dollar buying, as the focus shifts to the US rigs data.
WTI (oil futures on NYMEX) failed another attempt to test the 70.50 barrier, as the sellers returned to the markets amid widespread risk-aversion fuelled by escalating global trade war fears.
The escalation of the tensions between the US and China combined with the re-emergence of Emerging Markets (EM) crisis roil investors’ appetite for risk assets, keeping the demand for the safe-haven US dollar underpinned. As a result, weighing down on the USD-sensitive and higher-yielding oil.
However, the corrective slide in the black gold could find some reprieve from the looming supply risks from Venezuela and Iran, as the US readies for another round of sanctions on OPEC’s no. 3 oil exporter in November, targeting its oil sector. Meanwhile, the recent reports showed that the crude exports from crisis-struck OPEC member Venezuela have almost halved to around 1 million bpd in recent years.
With the US weekly fuel stocks report now out of the way, the US oil looks forward to the Bakers and Hughes oil rigs count data due later today at 1700 GMT for fresh trading impetus.
WTI Technical Levels
Mohammed Isah, Technical Strategist at FXTechstrategy, explains “On the downside, support resides at the 69.50 level where a break will expose the 69.00 level. A cut through here will set the stage for a run at the 68.50 level. Further down, support resides at the 68.00 level. On the upside, resistance resides at the 70.50 level. Further out, resistance comes in at the 71.00 level. A break above here will aim at the 71.50 level and then the 72.00 level followed by the 72.50 level. Its daily RSI is bullish and pointing higher suggesting further strength.”
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