Crude prices are challenging the $60 handle at the start of this week as the focus remains on OPEC, the Chinese economy, and tensions in the Middle East. The black gold is basing in the $60 handle, as the fundamentals combined paint a bullish backdrop, with prices buoyed by positive Sino-US trade talks as well as the OPEC+ deal kicking in. As for OPEC, the IEA published its monthly oil report on Friday highlighting the same concern as OPEC’s monthly oil report where rising non-OPEC production offset OPEC’s effort to balance the market. Meanwhile, the geopolitical news for last week stayed on Iran. Britain was raising the shipping threat level to its highest following continued threats of retaliation for the seized Iranian tanker. However, Britain will work for the release of the supertanker if Iran guarantees the ship will not travel to Syria, in breach of European Union sanctions. That could help ease soaring tensions between Iran and the West and deflate oil prices a touch.
Crude prices eased during Friday’s session and continue to do so this morning as the $60 handle is being strongly challenged after the momentum retreated significantly from the overbought zone. The price is currently trading just below the $59.99 resistance level with the RSI still pointing towards a weakening momentum. We will be focusing on near support levels especially the $59.28 level before we focus on the upside again.
Support: 59.28 / 58.8
Resistance: 59.99/ 60.24