WTI extends its U-turn from this week’s highs this morning despite the geopolitical tension. The black gold fails to portray larger than the previous draw of inventory levels, -7.200M versus +0.401M prior, shown by the American Petroleum Institute’s weekly Crude oil stock report for the US. The energy benchmark also seems to ignore tensions surrounding Iran and Turkey. Iran recently warned the US to take back its troops off Afghanistan while Turkey is bearing the burden of its hard stand against the Trump administration. Supporting the move could be expectations of a bit less tough action against the Middle East after the departure of the US National Security Adviser John Bolton. Also, China’s purchase of oil from Iran is likely to raise barriers for the US-China trade talks, up for October, which in-turn could dampen the outlook for future oil demand.
Crude oil prices faced pressure after hitting new highs during yesterday’s session at $58.73 per gallon and retreated back below the $58 level. The price is currently trading just below the $57.81 resistance level with the momentum pulling away from the bullish territory. We will be focusing on the downside with the $56.79 support level on our watch.
Support: 57.4/ 56.79
Resistance: 57.81/ 58.26