- US-Iran tension joins supply-cut scenario to please bulls.
- The qualitative catalysts to dominate near-term price momentum.
With the US President Donald Trump going harsh on Iran and the OPEC+ group holding support for further production cuts, WTI is taking the bids near $63.60 during early Monday.
While 14-month low of the US oil rig counts signaled likely energy supply shortage in future, Organization of the Petroleum Exporting Countries (OPEC), Russia and some other non-OPEC oil producers, known as OPEC+ alliance, added further fuel to supply crunch expectations as the group agreed to continue limiting production levels at a Joint Ministerial Monitoring Committee (JMMC) meeting.
Further on the bullish side was the US-Iran tension that has been more serious off-late after the Sky News reported that a “rudimentary rocket” has been fired into the Green Zone near the US Embassy in Baghdad, Iraq.
The US President Trump reacted with fury to this situation by tweeting that if Iran wants to fight, that will be the official end of Iran. Never threaten the United States again! Additionally, Mr. Trump also said in his interview with Fox news channel that he will not let Iran have nuclear weapons.
The black gold reacted well to the fundamentals and rose to the highest levels since May 01.
Given the lack of economic data on the calendar, energy traders may keep concentrating on macros for fresh impulse. Among them, the US-Iran and the US-China news headlines may grab more attention.
Technical Analysis
Sustained trading above $62.50 enables the buyers to aim for $64.70/80 resistance-area ahead of questioning $65.70 and April highs near $66.60.
On the downside break of $62.50, 50-day simple moving average (SMA) near $61.90 and $60.70 may entertain short-term sellers.
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