WTI clings to monthly top as geopolitics play their parts
- Iran’s political tussle with the US indicates an immediate supply-crunch threat.
- The OPEC+ group’s likely extension to output limiting agreement and recent inventory data also please WTI bulls.
With the political tension between the US and Iran providing enough entertainment to the energy traders, WTI takes the bids around $57.75 during early Monday.
As per the Bloomberg report, the US President Donald Trump said that he will impose major new sanctions on Iran Monday. President Trump abruptly called off strikes on Iran during last-week after the later shot down one of the former’s drone and complained the United Nations (UN) that they have witnessed unmanned US aircraft moving around their space.
The new sanctions might have emphasized on the recent statement from Iran that points to the nation’s desire to increase its nuclear arsenal.
Elsewhere, latest statements from Saudi Arabia’s Oil Minister Khalid A. Al-Falih indicate that the Organization of the Petroleum Exporting Countries (OPEC) led alliance, generally known as OPEC+, is planning to extend the global output supply cut accord.
Further, last week's oil stock reports concerning the US has been positive to the prices whereas investors seem to have given little importance to the increase of 1 rig as conveyed by the Baker Hughes US oil rig counts.
Weighing on the quote could be the US-China trade tension that continues to challenge future energy demand.
Looking forward, news/developments surrounding politics can play an important part while directing near-term oil moves.
Technical Analysis
FXStreet Analyst, Ross J Burland, says that the energy benchmark is en-route for the 200-D EMA around $58.80:
WTI was capped at the weekly 20-Experiential Moving Average. Bulls ran higher through the 20-D EMA and topped the 50-D EMA. Bulls are on track for the 200-day Exponential Moving Average, (EMA), and 4-hour 200 EMA. A break there will expose the 30th May highs of $59.67 and of course the $60 psychological level. On the downside, the 200 weekly EMA (last week's low) and the 61.8% Fibo come into focus that guard prospects for a correction to back towards the14th Jan 50.41 low and then the 26th November lows at 49.44.