- Return of Libyan oil and USD rally negate tighter markets.
- WIT consolidating after a volatile week, as focus shifts to the US drilling report.
WTI (oil futures on NYMEX) paused the recent sell-off to twelve-day lows and now consolidates in a tight range around the $ 70 mark, as markets await the US rigs count data for the next direction.
Despite the stalled selling, the black gold keeps the offered tone intact and remains on track to book a weekly fall of nearly 5 percent, as markets remain weighted down by the ongoing strength in the US dollar versus its six major currencies.
Meanwhile, reports that Libya’s Tripoli-based National Oil Corporation (NOC) reopened four export terminals after eastern factions handed over the ports, threatened the prospects of a tighter market and collaborated to declines in the barrel of WTI.
Further, slowing Chinese oil demand also continues to undermine the commodity, especially after the latest Chinese trade data showed that China’s crude oil imports fell for the second month in a row in June.
Looking ahead, traders will continue to remain nervous ahead of the US drilling activity report that will be published by Bakers and Hughes oilfields Services Company while markets digest the latest comments by the Russian Energy Minister Novak.
WTI Technical Levels:
According to Jason Sen at DayTradeIdeas.com, “WTI Crude low just 12 ticks below the best support for the day at 6945/35. The recovery tests first resistance at 7060/70 but we could reach a selling opportunity at 7150/60 today, with stops above 7200. Failure to beat first resistance at 7060/70 risks a retest of strong support at 6945/35. Try longs with stops below 6885. A break lower is expected eventually, although more likely next week than today, to target & Fibonaccisupport at 6825/15.”
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