WTI catches fresh bid, regains $ 52 mark ahead of API

Having rallied almost 1% on Monday, WTI (US oil futures on NYMEX) corrected lower in the overnight trades, only to find fresh bids near $ 51.65 levels, now pushing the rate back above $ 52 threshold.

The renewed uptick in the black gold can be attributed to increased risk premium on the back of escalating geopolitical tensions around Iran and Iraq. Escalating tensions between the Iraqi government and Kurdish forces continue to threaten supply, with Goldman Sachs noting: “In the case of Kurdistan, the 500,000 bpd Kirkuk oil field cluster is at risk with initial reports that 350,000 bpd has shut in, although this remains unclear.”

Moreover, the political tensions between the US and Iran over the nuclear deal and looming concerns over potential sanctions over Iran, also collaborates to the buoyant tone seen around oil prices. The US President Trump refused to continue to certify the 2015 Iran nuclear deal on Friday.

Furthermore, oil prices got a lift on the back of the IEA Head, Faith Birol’s optimistic remarks, citing that he sees OPEC cut compliance higher at 86%. All eyes now remain on the US API crude stockpiles report for the next direction on the prices. At the time of writing, WTI advances +0.64% to $ 52.20, while Brent rises +0.54% to $ 58.20.

WTI Technical Levels

Higher-side levels: 52.43 (Sept 26 high), $53.21 (Apr 16 high), $ 54 (round number)

Lower-side levels: 51.85 (daily pivot), 51.50/ 51.59 (psychological levels/ 5-DMA), 51.07 (20-DMA)