- WTI fails to sustain any recovery above the 60 handle.
- US-Iran geopolitical de-escalation, USD strength depress the bulls.
- Focus on geopolitics/ trade and US data for fresh impetus.
WTI (oil futures on NYMEX) is trading with small gains in a narrow range around the 60 handle so far this Thursday, as the dust settles over the Iranian retaliation aftermath while broad US dollar strength limits any upside attempts.
The black gold extends its consolidative mode into the European session, as the bears take a breather following Wednesday’s sell-off further fuelled by US President Trump de-escalation address in the US last session.
Earlier on Wednesday, the prices completed a lap and returned to the levels seen before Iran’s retaliatory attacks against the US’ airstrike on Quds Force Commander Soleimani in Iraq last Friday. The commodity reached fresh 8.5-month highs of $65.65 in early hours of Wednesday after Iran fired more than a dozen missiles on the US airbases in Iraq.
However, the corrective slide in the barrel of WTI picked-up pace after Trump said that Iran appeared to be standing down on its military response and called for peace amongst both sides. The Mid-East calm pours cold water on the likely supply disruption risks in the event of any escalation.
Moreover, oil prices came under additional downside pressure after Wednesday’s Energy Information Administration (EIA) crude inventories data showed that crude oil stocks rose by 1.2 million barrels in the week ended Jan. 3 to 431.1 million barrels vs. a 3.6 million-barrel drop expected.
The focus now remains on fresh developments on the Mid-East front while the US-China trade deal optimism will continue to keep the downside in check.
WTI Technical levels to consider
Share
