- Despite the bullish EIA data, WTI takes a hit in New York, tumbling lower on supply-side news.
- Saudi Arabia’s energy minister visited Kuwait to discuss resuming oil production in the Saudi-Kuwait Neutral Zone.
Despite the Energy Information Administration, (EIA), data which should a far bigger draw than expected, as well as Sino/China trade talks that brought an air of optimism and recent supply news hit the wires in New York trade. the price of WTI has dropped from $57.62 to a low of $55.36 on the day, falling 2.4% as the Iran noise settles down.
The EIA on Wednesday reported that U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19th and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month.
While Iran remains a risk, especially as Boris Johnson as the new UK Prime Minister is seen as a potential hawk that could align more closely with the U.S. the JCPOA meeting scheduled for this Sunday could ease tensions somewhat.
Elsewhere, U.S. Trade Representative Robert Lighthizer and senior U.S. officials are set to travel to China next week for the first high-level, face-to-face trade negotiations since talks broke down in May. This has given the upside bias in oil a lift on the hope of a potential breakthrough. However, in recent trade, citing Kuwait’s news agency, KUNA, Reuters in the last hour reported that Saudi Arabia’s energy minister visited Kuwait to discuss resuming oil production in the Saudi-Kuwait Neutral Zone.
WTI levels
The weekly charts have shown a strong rejection on the recent charts and the daily price action has been capped by the 200-day moving average. On the downside, on the wide, the 14th Jan 50.41 lows ahead of the 26th November lows, located at 49.44, are keen targets. First of all, bears will need to get below the 54.70s. On the upside, a push through 57.40 and the accumulation of daily 20, 50 and 200 moving averages opens the 20-week moving average. Thereafter, bulls will look to the 60 handle and double top in the 60.80s.
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