WTI ignores supply/geopolitical risk amid sluggish trade sentiment, high inventory build
- WTI retraces from 200-day SMA.
- Saudi Arabia’s plan for higher prices confronts EIA’s stockpile rise.
- Iran steps further away from Nuclear Deal, US-China “Phase One” deal in limbo.
Mixed plays surrounding the oil economy questions WTI’s latest pullback while holding it modestly changed around $56.50 during early Thursday.
The energy benchmark recently dropped from six weeks high after the weekly report published by the United States (US) Energy Information Administration (EIA) mentioned that crude oil inventories rose beyond market forecasts for a build of 1.5 million barrels to 7.9 million barrels in the week ending November 1st. Adding to the black gold’s weakness were concerns that the much-awaited trade deal between the US and China will now take place in December than earlier expected mid-November deadline.
However, the declines seem to be challenged off-late with Aljazeera news that Iran is heading further away from its nuclear pact with global leaders while officially injecting uranium gas into centrifuges in Fordow. Also restricting the downside were comments from the Iranian leader Khamenei.
Talks concerning Saudi Arabia’s push to global oil producers towards the Organization of the Petroleum Exporting Countries (OPEC) output cuts seem to have played its role in piercing 200-day SMA.
With no major oil-related data/events up for publishing, investors will keep a track of global trade/political headlines for fresh impulse.
Technical Analysis
A daily closing beyond 200-day Simple Moving Average (SMA) level of $57.50 could propel the quote towards late-September highs near $59.54/50 while $60.00 could be next on bulls’ target afterward. However, an extended pullback seems to drag the oil benchmark to the four-week-old rising trend line that stands around $54.55 by the press time.