Crude oil extends gains: WTI breaks above $58.00

• Crude keeps rising during the American sessions, WTI reaches the strongest level since July 17.  
• Price moving between Iran tensions and US-China trade talks uncertainty, API data eyes.  

WTI (West Texas Intermediate) continue to rise late during the American session and reached at $58.30, the highest level in almost two weeks. As of writing, it is hovering around $58.10, up 2.15% for the day.  

Iran’s oil exports dropped in July due to sanctions and rising tensions with the US and also UK. Reuters reported today that exports fell to as low as 100,000 barrels per day. The decline in global supply supports the upside in crude oil.  

Also technical factors contribute to the recent move higher. WTI broke a key resistance near the $57.00/30 area that capped the upside last week. Another bullish factor for crude oil is the anticipation of a rate cut from the Federal Reserve. In about an hour, API data will be released.  

Fundamental Outlook  

According to analysts at Rabobank, the fundamental outlook for oil supplies is “arguably as bullish as it’s been in quite some time.” They explained that OPEC+ cuts, led by an aggressive Saudi policy,  were officially rolled forward through the end of the year at the early July meeting; Iran and Venezuela are facing crippling US sanctions and have also sharply reduced production as a result; oil tankers are being regularly harassed and attacked in the Strait of Hormuz and Libya remains at risk of civil war.  

“Reduced ex-US supplies combined with firm IMO 2020 supported demand will result in a tight global oil balance, which should put upward pressure on prices“, explained Rabobank analysts. They forecast, WTI to reach $70.00 during the third quarter.