Crude oil: WTI bull party continues amid Fed, EIA draw and Iran nuclear deal

• WTI bulls are targetting the high of 2018.
• EIA draw, weak USD, geopolitical turmoil is the perfect storm for oil.

Crude oil is trading at around 65.49 up almost 3%  as geopolitical tensions intensify and oil demand increases. The meeting between Trump and Saudi Crown Prince Mohammad Bin Salman might be seen as a sign that Saudi Arabia and the US might take a tougher stance on Iran. 

“A lot of bad things are happening in Iran,” Trump said. "The deal is coming up in one month and you will see what happens and you’re going to see what I do.” This remark sent oil higher. 

What caught traders by surprise is the President Trump's call to Russian President Vladimir Putin. Trump congratulated him on his victory and said: “We had a very good call,”. Trump is expected to meet Putin to discuss the arms race, which is getting out of hand.

Evidence of the tightening of the oil market can be witnessed in the American Petroleum Institute (API) report which surprisingly showed a draw of 2.739 million barrels of oil on Tuesday. Most analysts were expecting a 2.556 million barrels build. 

On Wednesday the EIA report showed crude oil supplies decrease by 2.622 million barrels versus a build which analysts were expecting at 2.556 million barrels. 

The Fed has hiked rates, but only forecasts to hike two more times in 2018 versus three anticipated by the market. And the US dollar sank as crude oil rose. 

Crude oil daily chart:

The next resistance is seen at 66.66, which is the high of 2018. After which the 70.00 figure is likely the next scaling point. Support is seen at 63.39 and 62.39 which are the 61.8% and 50% Fibonacci retracement of the January-February bear leg.