WTI extends the bounce towards $ 69 mark

• US-Iran tensions re-ignite, put bid under WTI.
• Bullish bias intact, eyes $ 68.90 – next supply zone.

WTI (oil futures on NYMEX) found fresh bids once again just below the $ 68 mark, now looking to extend the bounce beyond the midpoint of the 68 handle.

The latest upturn in the prices is mainly driven by the renewed supply disruption concerns, fuelled by the revival of geopolitical tensions between the US and Iran. Iran’s President Rouhani warned the US over a war while the US President Trump responded to Rouhani by tweeting, ‘never ever threaten’ US again. Recall that Iran is the OPEC’s no.3 oil exporter.

However, it remains to be seen if the black gold can sustain the bounce, as markets remain on the edge following the warning by the G20 Finance leaders over the risks to the global economic growth, which could eventually weigh negatively on the global energy demand.

More so, rising US output combined with unexpected crude stockpiles build could also keep a check on the upside. Further, in an evidence of reduced confidence in the barrel of WTI, Hedge funds and money managers cut their bullish wagers on the US crude for the first time in nearly a month, the latest Commodity Futures Trading Commission (CFTC)  showed.

Focus now remains on this week’s US crude supplies report for fresh trading impetus. Meanwhile, the US dollar price-action and broader market sentiment could influence the prices.

WTI Technical Levels

According to the Swissquote Bank Research Team, WTI “long positions above 67.70 with targets at 68.90 & 69.15 in extension. Below 67.70 look for further downside with 67.20 & 66.60 as targets. A support base at 67.70 has formed and has allowed for a temporary stabilization.”