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  • Crude markets are looking beyond  tanker war fears.
  • Demand pressures to persist on the geopolitical front.

West Texas Intermediate crude prices are lower in Asia, extending the downside form US afternoon trade where priced dropped from the $53.70s. Spot is trading at $52.84, -0.17% at the time of writing having made a low of $52.75 As for futures, the  November delivery added  55 cents, or 1%, to settle at $53.36 a barrel on the New York Mercantile Exchange, climbing back from a two-day skid for the U.S. benchmark.  

Demand pressures cited by EIA  

However, demand pressures will persist on the geopolitical front and the International Energy Agency, Energy Information Administration, and Organization of the Petroleum Exporting Countries have revised year-on-year demand expectations lower in recent quarters.

“Crude markets are comfortable looking past tanker war fears, supply disruptions (both structural and temporary) and boiling geopolitical tensions as expectations for a hefty surplus place a cloud on any supply-side optimism, ” analysts at TD Securities explained – “This will pose a challenge to OPEC when they are scheduled to meet in December. In the meantime, CTAs could add some marginal upside flow to gasoline, but algos are likely to get whipsawed in heating oil if prices are unable to close north of the 193 mark.”

WTI levels

While below the 50 and 21-day moving averages, WTI remains directly offered and bears seek a close below the 50 handle which will bring the prospect of a run down to the Nov 2018 lows at 49.39 again. This area protects the 46.90 level ahead of the 18th Dec lows down at 45.77 ahead of the Dec double bottom lows below 42.50. However, should the bulls break through trendline resistance and exceed the 21 and 50 DMAs, then the 56 handle ahead of the 200 DMA come back into play guarding the 57 handle.