Search ForexCrunch
  • WTI stays below nearly eight-week-old rising trend-line.
  • Easing geopolitical tension, demand-supply concerns weigh on the energy prices.
  • Headlines Manufacturing PMIs, API data will be followed for fresh impulse.

While price negative headlines form the Middle East and Russia diverted market attention off China data during week-start trading, WTI stays modestly changed near $54.50 amid early Asian morning on Tuesday.

Not only mixed economics from China but Saudi Arabia’s refrain from harsh steps towards Iran and the following response of Tehran also seems to have helped drag the oil benchmark to the 13-day low on Monday. Adding to the weakness were concerns about increasing output supply as Saudi Aramco conveyed full recovery from the drones attack that has roots from Iran. Elsewhere, Russian Energy Minister Alexander Novak shows readiness to consider starting new oil projects in Iraqi Kurdistan.

It should also be noted that the Washington Post’s news concerning the return of global investors to Saudi Arabia also indicates a future increase in oil output and could have weighed on the sentiment.

Westpac follows market footsteps while blaming geopolitics for the recent decline in oil prices as it says, “Political tensions have also eased, with Saudi Arabia and its allies taking a more cautious approach to the situation. This has seen crude oil prices come off sharply since the days after the attack. In fact, Brent crude is trading only USD0.60/bbls higher than the day before the Houthi rebels launched a drone attack on Saudi’s oil facilities.”

Investors now await details of manufacturing purchasing managers’ index (PMI) from the Euro-zone, the United States (US) and the United Kingdom (UK) for fresh details whereas weekly release of the US Crude Oil Stock by the American Petroleum Institute (API) could as well entertain energy traders. Further to note is that the Chinese markets are off for a week, which in turn could limit the US-China trade headlines.

Technical Analysis

Unless rising back beyond an ascending trend-line since August 07, at $55.10 now, WTI is less likely to revisit the 50-day exponential moving average (EMA) level near $56.50. As a result, late-August low nearing $53.00 seems to be on the bears’ radar for now.