WTI wilting below trendline resistance

• WTI has been testing the bear’s commitments at trendline resistance.
• WTI is  slightly lower than overnights highs following the API inventory data.

Oil prices followed in the footsteps of global equities with spot West Texas Intermediate rallying over 4.5% overnight, ending in Wall Street’s close around $56.28 having spiked from the lows of $53.86 to score a recovery high of $56.55. October West Texas Intermediate oil added $2.32, or 4.3%, to settle at $56.26 a barrel on the New York Mercantile Exchange, scoring their largest one-day gain in around two months.

WTI is currently trading at $55.97, +0.02% at the time of writing, slightly lower following the API inventory data that showed a surprise build vs the draw that was expected. Crude was a +400k build vs the -2mm expected.  

Mixed fundamentals

Meanwhile, analysts at ANZ Bank noted that the US announced plans to intensify sanctions against Iran. “It placed new sanctions on the Islamic Revolutionary Guard Corps shipping network after it accused the group of helping move millions of dollars of oil to the militant group, Hezbollah. The US also warned of sanction risks related to oil shipments to Syria.”

However, stalling trade talks continue to place a cloud on energy markets, particularly as angst grows on the prospect for demand to recover amid slumping growth signals globally which likely leaves the black gold range-bound for the foreseeable future.  

WTI levels

The 60 handle is  back into the picture having closed above the 200-daily moving average and testing the bear’s commitments at trendline resistance and above the 50% retracement of the July swing lows and highs. The move has left the 61.8% Fibo at 51.70 back in the rearview mirror.