- WTI has met supply below yesterday’s NA high as the DXY corrects European supply.
- WTI had pierced 69 the figure again with a high so far of $69.15bbls.
- Energy prices are firm still on the reports that Saudi Arabian crude output unexpectedly fell in July.
Once again, Oil prices have been perky today following yesterday’s bullish market on due to the revived U.S. sanctions against Iran and after Saudi Arabia’s production contracted. WTI has made a high in late London at $69.15bbls but has met supply just short of yesterday’s high as the greenback picks up a North American bid that had otherwise been sliding in European markets. The Saudi production data came as surprise to traders at the start of this week, presuming that Saudi production would have risen in July given the pledges from Russia and the Organization of the Petroleum Exporting Countries where they had supposedly agreed in late June to begin ramping up crude output after more than twelve months of curbing output. (Traders will be on the lookout for an official monthly report from OPEC for July’s output on August the 13th).
The Iran factor remains bullish for Oil
Meanwhile, the Trump administration went ahead this week on its vow to reimpose sanctions on Iran. The plan is to mastery the US allies from importing Iranian oil products and crude after the White House in May abandoned the 2015 international nuclear deal. Trump administration’s first deadline for companies to wind down some transactions with Iran has started this week. This of will hit Iran’s ability to access dollars, engage in some financial activity and attract investment into its auto and aviation industry. However, there are no actual energy sanctions imposed at this stage, but there will be some due later this year. Iran’s oil exports could fall by as much as two-thirds this year with the US ultimately blocking more than 1 million barrels a day of Iran’s roughly 2.5 million barrels a day of crude exports
Traders will now look ahead to the weekly API’s Weekly Statistical Bulletin today and then the U.S. inventory data from the Energy Information Administration.
WTI levels
WTI has fallen short of the daily trend line resistance at 6916 and has dipped on the dollar’s correction. There is the making for a double top here but the mood in commodities is solid and the next target to the upside will be for a test of 6940 before the three-week trend line resistance at 7000/7010 where a run of 7045 stops open a target price of 7115. 6870 and 6830/20 ahead of 6780/70 around Friday’s lows are key downside targets ahead of the range low at 6700/6690.
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