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  • WTI keeps the gains as the US and the Middle East remain at loggerheads.
  • France, Germany and the UK are indirectly supporting the US, while favoring the de-escalation in the tension, as Iran vows to enrich uranium.
  • US President Trump tweeted to ‘quickly and fully strike back’ the Iranian attacks in Kenya and Baghdad.

WTI takes the bids to $64.00, after making the high of $64.30, amid the early Asian session on Monday. The energy benchmark remains on the front foot amid the US-Middle East tension. Also supporting the price rally are the latest oil inventory and rig count numbers from the US.

It’s all about US-Iran in the air…

The US killing of top Iranian military leader, with the argument that he was plotting for a big attack, triggered heavy risk-off during the late last week. The Trump administration’s arch-rival, Iran, mourned for a few days and started taking revenge during the weekend while bombing the US targets in Kenya and Baghdad. Additionally, Hassan Rouhani-led diplomats also vowed to enrich uranium and put aside the recent global push to not do it. Furthermore, Iraq’s parliament has also voted to push the US military out.

In response, US President Donald Trump recently tweeted to “quickly and fully strike back” whereas the US State Department urged Iraqi diplomats to re-think their push. The UK, Germany and France oppose the Middle East behavior while indirectly supporting the US. However, overall headlines are showing that these three want de-escalation of tension.

Other than the geopolitical tension, the official US crude inventory numbers, released Friday by the Energy Information Administration (EIA), as well as the Baker Hughes Oil Rig Counts, are also supporting the price rise. The US oil stockpiles for the week ended on December 27 declined more than -3.288M expected to -11.463M. Further, the Baker Hughes US Oil Rig Count slipped below 677 prior to 670.

While a slew of headlines keeps coming out of the Middle East, oil traders might not risk missing any.

Technical Analysis

Prices are well in a position to question 2019 top surrounding $66.60 unless declining back below the one-month-old support line, at $61.50 now.