- Supply risks from Iran sanctions outweigh rising US output, Saudi oil boost
- Broader market sentiment, US GDP and consumer durable goods to offer fresh trading impetus.
Following the overnight rally, WTI (oil futures on NYMEX) has entered into a phase of upside consolidation, as the bulls take a breather before making another attempt to test the eleven-week tops of $ 72.75.
The black gold is still up 1% amid a potential global supply disruption threat, as the US seeks to impose additional sanctions on Iran from November 4th, targeting its oil sector.
The risks to the global oil supplies appear to have outweigh the negative impact of the rising US output and the latest Reuters headlines, citing that Saudi Arabia and other oil producers discussed possible output increase.
Moreover, the barrel of WTI also ignored broad-based US dollar strength induced by hawkish FOMC statement. A stronger US dollar usually makes the USD-denominated oil more expensive to the holders in foreign currencies.
Markets now look forward to the US macro news, including the Q2 final GDP and durable goods data, for any impact on the USD-sensitive oil.
WTI Technical Levels
Resistances: $ 72.83 (mid-May tops), $ 73 (round number), $ 73.50 (psychological level).
Supports: $ 71.92 (5-DMA), $ 70.73 (Sept 20 low), $ 70.52 (10-DMA).
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