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  • Oil trapped near key levels as the US wants it both ways.
  • WTi  has bounced in recent weeks into fresh highs as supply constraints mix with Iran sanctions.

Crude oil is back on the defensive for Thursday with WTI crude trading into the 74.00 key level.

Following a Tweet from US President Trump calling on OPEC to further increase their oil output in order to bring oil prices down, crude prices are continuing to trade near the middle, with WTI backing down after peaking for the day at 74.51. Immediate action from OPEC is unlikely, as the oil cartel already recently agreed internally to lift their production caps in July, in a move to partially unwind a 1.2 million barrel per day (bpd) limit cut that the collective group made in 2016.

Oil prices continue to be bolstered largely by the US’ stiff sanctions on Iran after withdrawing from the Iran nuclear accord, and the US has been pushing allies to forbid imports of oil from Iran. The push to see Iran shut out of global oil markets is seeing crude prices receive a decent bolster, while supply cuts from Canada and Libya’s recent loss of two key ports to rebels has seen crude sticking to the high side.

WTI levels to watch

WTI crude prices current have a floor at the last major swing low of 63.59, while the 50% Fibo retracement of that level sees potential support at 69.40; bulls will have to push WTI back over the current swing high of 75.40, the current multi-year high for the energy commodity.