WTI off-lows, retakes $ 69 ahead of API data

• Attempts a bounce as DXY buying loses steam across the board.
• Prospects of renewed US sanctions on Iran supports oil ahead of API data.

WTI (oil futures on NYMEX) extended yesterday’s rebound and now looks to test the 3.5 year tops of $ 69.56, as fresh bids emerge near the $ 68.80 region.  

The renewed uptick above the $ 69 mark is largely due to the stalled buying seen around the US dollar versus its main competitors while the latest warning by the Iranian President Rouhani to the US over the nuclear also offered fresh impetus to the bulls.

The Iranian President warned the US President Trump against leaving the nuclear deal. The US has until May 12 to decide whether to quit a nuclear deal with Iran and reimpose sanctions against Iran, which lead to tightening of global supplies. Iran is the OPEC’s no. 3 oil producer.

However, it remains to be seen if the black gold can sustain the rebound, as attention now turns towards the weekly US crude supplies data from the American Petroleum Institute (API) due later on Tuesday at 2030 GMT.

WTI Technicals

According to Slobodan Drvenica at Windsor Brokers, “WTI oil regained strength and bounced above $69 on Tuesday, after attempts to extend corrective pullback from new high at $69.54 (posted on 19 Apr) was strongly rejected on Monday. Rising 10SMA contained dip and continues to underpin fresh advance (currently at $67.71). Firm bullish setup of daily techs remained intact and fresh attempts higher turn focus towards the initial target at $70.00. Res: 69.54; 70.00; 71.86; 73.10. Sup: 68.75; 67.68; 67.12; 66.64.”