Search ForexCrunch

   “¢   Oil prices remain supported by Saudi Arabia’s comments not to flood markets.
   “¢   Subdued USD demand provides an additional boost, albeit up-move remains capped.  

WTI crude oil prices built on overnight recovery move from near one-month lows and edged higher through the early European session on Friday.

The commodity has fallen this month in wake of escalating US-China trade tensions and mounting concerns about renewed oversupply. However, comments by Saudi Arabia’s Energy Ministry, pledging not to flood world markets with oil, turned the momentum around on Thursday and helped the commodity to rebound sharply from an intraday low level of $66.62.  

Saudi Arabia’s OPEC Governor Adeeb Al-Aama said in a statement that the Kingdom expects crude exports to fall by roughly 100,000 barrels a day in August and there will be a substantial stockpile decline due to robust demand in the second half of this year.

Adding to this, a broad-based US Dollar sell-off, triggered by the US President Donald Trump’s comments that a stronger currency puts the US at a disadvantage, provided an additional boost to dollar-denominated commodities, including oil.  

The positive momentum, however, lost some steam ahead of the $69.00/barrel mark, with easing USD bearish pressure now seemed to keep a lid on any further up-move. Moving ahead, traders now look forward to the Baker Hughes rig-count report for some fresh impetus on the last trading day of the week.  

Technical levels to watch

Immediate resistance is pegged near $68.78 (overnight swing high) and is followed by $69.06, above which the commodity is likely to aim back towards reclaiming the $70.00 psychological round figure mark.

On the flip side, weakness back below the $68.00 handle now seems to find support near the $67.80-60 region, which if broken might turn the commodity vulnerable to slide back towards $67.00 round figure mark.