WTI recovers toward $74 on reports of explosion at Canada's biggest refinery

• News outlets report a fire and large explosion at Saint John oil refinery.
• Qatar's Energy Minister argues that oil market is balanced in terms of supply and demand.
• Tropical Storm Michael approaches Gulf of Mexico.

After pulling away from 4-year highs in the second half of the previous week, the barrel of West Texas Intermediate started the new week on a weak note and fell all the way down to $73. With a modest recovery in the last hour, the barrel of WTI rose to $74 and was last seen trading at $73.90, still down around 40 cents, or 0.55, on the day.

Earlier in the day, escalating political tensions amid the ongoing trade conflict between the U.S. and China revived concerns over the potential negative impact on China's oil demand. Commenting on rising oil prices, Qatar's Energy Minister Mohammed al-Sada argued that the market was in balance in terms of supply and demand and geopolitical changes were the main catalyst.

Meanwhile, reports of a large explosion and fire in Canada's largest oil refinery, Saint John, provided a boost to crude oil prices in the last couple of hours. Although it's still unclear how the production is going to be affected, investors seem to be pricing a decline in the output. Furthermore, Exxon Mobil recently announced that it started evacuating personnel from its platform located in the Gulf of Mexico ahead of the Tropical Storm Michael to provide an additional boost to the WTI.

Technical levels to consider

With a decisive break below $73 (daily low), the barrel of WTI could target $72 (20-DMA) and $70.80 (Sep. 24 low). On the upside, resistances could be seen at $73.50 (daily high), $75 (psychological level) and $76.40 (Oct. 4 high).