WTI attacks $ 69 as China slowdown fears resurface

• Saudi Arabian shipments suspension led rally fizzles out, as China slowdown worries knocks-off oil.
• Eyes $ 68.20 support area, despite on track for a positive closing on the week.

WTI (oil futures on NYMEX) fell sharply in the European session and tested the $ 69 support, as risk-sentiment soured amid fears that China slowdown could hit the energy demand from the world’s second-biggest oil consumer.

WTI stalls two-day rebound

The barrel of WTI stalled its upside attempt once again near the 69.70 region, as the sellers returned to the markets amid a recovery in the US dollar across the board. This could be also attributed to the latest leg down in prices.

WTI rallied to the highest levels in a week at $ 69.69 after its European counterpart, Brent, jumped on reports that Saudi Arabia suspended crude shipments through a strategic Red Sea shipping lane.

Also, the latest bullish data from the US Energy Information Administration (EIA) also lifted the prices closer towards the $ 70 mark.  The US crude inventories fell 6.1 million barrels in the week to July 20,  marking their lowest level since February 2015.

Next of relevance for the markets remain the US durable goods data for further momentum on the USD-sensitive commodity.

WTI Technical Levels

According to Jason Sen at DayTradeideas.com, “WTI Crude beat 6880/90 to trigger stops above 6940 as we target 6970/80, perhaps as far as 7035/45. Try shorts with stops above 7075.Failure to beat 6970/80 targets 6935/30 & support at 6890/80. On further losses look for better support at 6840/30.”