- Dragged down by risk-aversion amid escalating tensions over Iran’s nuclear program.
- USD pullback, OPEC supply cuts to keep the downside cushioned.
Following a brief stint of consolidation in Asia around multi-day tops, WTI (futures on Nymex) refreshed highs in Europe at $ 57.91, although failed to sustain at higher levels once again.
The black gold came under renewed selling pressure and erased early gains to now trade unchanged near the midpoint of the 57 handle, as the escalating tensions around the Iranian nuclear program keep the investors away from the risky assets such as oil, equities, Treasury yields, etc.
The Iranian tensions flared up after Tehran said on Sunday it will soon boost its uranium enrichment above a limit set by a 2015 nuclear deal (JCPOA). Meanwhile, the US-China stand-off on the trade spat also continues to undermine the sentiment around oil.
However, the buyers continue to lurk at the lower levels amid a broad-based US dollar retreat following the US payrolls data-led solid upsurge seen on Friday. A weaker US dollar makes the USD-denominated oil cheaper for foreign buyers. Moreover, the OPEC output cuts extension also continue to keep the downside limited.
Markets now await the US weekly crude stockpiles data for the next direction on the prices. Meanwhile, the barrel of WTI will remain at the mercy of the risk sentiment influenced by the geopolitical tensions.
Levels to watch
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