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  • WTI witnessed some selling for the third consecutive session on Thursday.
  • Progress on a deal to lift sanctions on Iran exerted some intraday pressure.
  • Renewed USD selling bias extended some support and helped limit losses.

WTI crude oil remained depressed through the early North American session, albeit has managed to recover a part of intraday losses and was last seen trading around the $62.80 region.

Following an early uptick to the $63.90 region, the commodity witnessed some fresh selling and drifted into the negative territory for the third consecutive session on Thursday. The sharp intraday fall was sponsored by reports that progress was made towards a deal to lift sanctions on Iran, which could boost global crude supplies.

This, along with worries that surging COVID-19 cases and the imposition of fresh restrictive measures in some Asian countries would hinder fuel demand recovery, acted as a headwind for the black gold. The downward momentum dragged the commodity back closer to three-week lows touched in the previous session, albeit stalled near the $62.00 mark.

Despite Wednesday’s hawkish FOMC minutes, the US dollar struggled to capitalize on its attempted recovery from multi-month lows amid a sharp pullback in the US Treasury bond yields. The USD remained depressed following the release of mixed US macro data, which, in turn, extended some support to dollar-denominated commodities, including oil.

From a technical perspective, the $62.00 mark might now act as a key pivotal point for short-term traders. A sustained break below might prompt some aggressive technical selling and turn the commodity vulnerable to break below the $61.00/barrel mark and accelerate the slide to test the next relevant support near the $60.60-55 horizontal zone.

Technical levels to watch

 

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