- WTI extends recovery gains from the four-day low.
- The US conducts retaliatory strikes in Iraq, OPEC+ meeting less likely to happen on March 18.
- Headlines concerning coronavirus, US-Iran relations as well as Baker Hughes Rig Counts will be in the spotlight.
With the geopolitical tension emanating from Iraq favoring the energy prices, WTI bounces off four-day low to $31.80, up 1.37%, during Friday’s Asian session. In doing so, the black gold pays a little heed to the broad risk aversion backed by the coronavirus (COVID-19) woes.
Following the attacks that killed two of the US citizen, also one from the UK, the US military conducted strikes over the Iran-Iraqi militia while hitting Iraqi Hezbollah the hardest. Although the response from Iran is still absent, attacks on the troop are putting the bid on the oil prices amid hopes of escalation in the old drama between the West and the Middle East.
Also supporting the price could be a surprise infusion of liquidity, via 500 billion Japanese yen repo action, by the BOJ. Furthermore, speculations are making rounds that the talks between US President Donald Trump and Saudi Prince could help to stop the carnage of crude prices while Russia’s readiness to attend the OPEC+ meeting on March 18 adds smiles on the face of the oil trades.
On the contrary, broad risk aversion and a blood bath in the global markets continue to put a lid on the commodities. Coronavirus (COVID-19) keeps the risk-tone heavy with the US 10-year treasury yields declining 10 basis points (bps) whereas Japan’s NIKKEI dropping 9.0% by the press time. Additionally, the OPEC+ meeting is still doubtful to take place on March 18.
Moving on, qualitative catalysts could keep the driver’s seat while the weekly release of the Baker Hughes US Oil Rig Counts, prior 682, will decorate the economic calendar.
Technical Analysis
Unless bouncing back beyond December 2018 low surrounding $42.45/50, bears are less likely to lose the hope to recall sub-$30 region.
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