- Oil prices have been rising on the day, but technically trapped in a bar trend.
- Fundamentals are a weight and focus is on the downside.
Oil prices have been rising on the day, with WTI rising from a low of $53.71 to a high of $55.05, +2.31% on the day so far. Futures also rose on Tuesday, with U.S. prices up by more than 2%, on OPEC production cuts noise and expectations for a sizable weekly decline in U.S. crude supplies. October West Texas Intermediate oil CLV19, +2.52% climbed $1.29, or 2.4%, to settle at $54.93 a barrel on the New York Mercantile Exchange
The Organization of the Petroleum Exporting Countries’ Joint Ministerial Monitoring Committee pegged July compliance with pledged output cuts at 159% which was the highest monthly compliance rate so far this year. Meanwhile, ahead of government supply data due tomorrow, a survey of analysts polled by S&P Global Platts showed that there are expectations for a 4.7 million-barrel decline in last week’s U.S. crude stocks.
Geopolitical front
On the geopolitical front, besides the conflicting signals about the prospect thawing US-Sino tensions, the G-7 gathering saw some additional geopolitical drama develop with Iran with foreign minister Zarif making a showing. “While this prompted speculation that it could lead to a resolution in the conflict, which would see Iranian oil flow back into the market, the reiteration that limiting missile testing was off-limits promptly quelled those hopes,” analysts at TD Securities argued.
WTI levels
Despite the comeback, the price is deteriorating in a broader view of the charts, pressured below the descending resistance line, pressured below the near term GMMA band now below the 20-daily moving average. With a focus on the downside and having taken out the trendline support, bears can now target a drop to the 52 handle and the 61.8% Fibo at 51.70 on the wide.
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