With the escalating tension concerning Iran and a surprise draw in API stockpiles, WTI takes the bids above the 56.27 support level during today’s early session. In its Crude Oil Stocks report for the week ended on August 16, the American Petroleum Institute says that a surprise 3.5 million barrels of decline was witnessed versus previous addition of 3.7 million barrels. The US Secretary of State Mike Pompeo recently said that the US will take every action consistent with its sanctions to prevent Iranian tanker from delivering Oil to Syria. Elsewhere, Australia’s Prime Minister Scott Morrison said, as per the Australian, that Australia will join the international mission to protect shipping through the Strait of Hormuz, contributing a navy frigate, a maritime patrol aircraft, and planning and operations personnel. Additionally, talks of explosions in Iraq and Iran’s readiness to counter the US keep pleasing the energy buyers whereas trade uncertainty keeps an upside in check.
Even though Crude prices plunged to a low of $55.15 per barrel during last session, momentum has picked up again and bulls took the prices to the highs again. The price is currently trading just above the $56.27 support level with the RSI pointing towards slow progress in the momentum. The black gold has still potential to go higher and we will be focusing on the purple trend line presented on the chart.
Support: 56.27/ 55.92
Resistance: 56.79/ 57.40