Oil on a bounce to start the week, WTI reaching for $68.00

• Oil prices continue to slowly recover after getting pinned to the mats last week.
• Rising US crude production is seeing a lifting effect on oil prices, but broader geopolitical tensions remain in place.

Crude oil is seeing some lift in the week’s early trading, with WTI testing above 67.80 as energies markets attempt to continue a bullish recovery after several weeks of declines, fueled by panic-selling across global equities.

Crude barrels bottomed out last week with WTI reaching the 66.00 handle before energies traders managed to bring crude’s declines back under control, and WTI is looking set to begin work back towards the 70.00 zone as US sanctions on Iran swing around on markets in early November.

Overall market sentiment remains cautious following last week’s free-fall plunge in equities, spurred on by rising fears of slowing growth around the world. Global trade is also seeing accelerating declines, with counts of raw-weight and bulk materials beginning to slide further amidst trade tensions, and the supply side of global oil markets remains tense in the run-up to US sanctions on Iran, as well as Saudi Arabia’s recent threats to clamp down on production following widespread backlash for the murdering of a Saudi citizen critical of the Arabian government and royal family.

Relief for American oil prices is likely to be seen from still-rising US production, with the EIA’s output count currently clipping 11 million barrels per day, up nearly a third from mid-2016’s numbers, and US production figures are expected to continue rising as US oil rigs continue to come back online, with the Baker-Hughes rig count clocking in another two rigs back online last week.

WTI levels to watch

The WTI chart is steeply off of early October’s peak at the 77.00 key handle, and US oil costs are currently in flux near the 200-day moving average, resting near 67.50, and last week’s bottom of 65.70 still sees the overall trend in bullish territory with higher lows tracking a slowly-rising channel on the higher timeframes.