WTI Crude Oil Trading

1. Crude keeps rising during the American sessions, WTI reaches the strongest level since July 17.
2. Price moving between Iran tensions and US-China trade talks uncertainty, API data eyes.

WTI (West Texas Intermediate) continue to rise late during the American session and reached at $58.30, the highest level in almost two weeks. As of writing, it is hovering around $58.10, up 2.15% for the day.
Iran’s oil exports dropped in July due to sanctions and rising tensions with the US and also UK. Reuters reported today that exports fell to as low as 100,000 barrels per day. The decline in global supply supports the upside in crude oil.

Also technical factors contribute to the recent move higher. WTI broke a key resistance near the $57.00/30 area that capped the upside last week. Another bullish factor for crude oil is the anticipation of a rate cut from the Federal Reserve. In about an hour, API data will be released.

Fundamental Outlook
According to analysts at Rabobank, the fundamental outlook for oil supplies is “arguably as bullish as it’s been in quite some time.” They explained that OPEC+ cuts, led by an aggressive Saudi policy, were officially rolled forward through the end of the year at the early July meeting; Iran and Venezuela are facing crippling US sanctions and have also sharply reduced production as a result; oil tankers are being regularly harassed and attacked in the Strait of Hormuz and Libya remains at risk of civil war.
“Reduced ex-US supplies combined with firm IMO 2020 supported demand will result in a tight global oil balance, which should put upward pressure on prices”, explained Rabobank analysts. They forecast, WTI to reach $70.00 during the third quarter.

1. Oil benefits from falling US stockpiles, constructive US-China trade talks.
2. Focus on EIA crude stocks data and FOMC decision for the next direction.

WTI (futures on Nymex) is seen consolidating the recent upmove to two-week highs of $ 58.58, as the bulls take a breather ahead of the key Energy Information

Administration (EIA) crude stocks data and Fed’s rate cut announcement due later today.

Supply risks continue to lend support
The Fed rate cut led optimism continues to underpin the sentiment around the black gold, as the Fed’s easing would lift the fuel growth demand amid a likely boost in the global economic growth.

Further, rising supply threats, in the face of a massive draw in the US American Petroleum Institute (API) and slide in the Iranian exports this month, remain the main underlying factor

Moreover, the latest report by the Global Times, citing that the US-China trade teams had constructive and deep talks, helps keep the buoyant tone intact. A trade deal is likely to calm ease global growth fears and benefit risk assets such as oil.

The bulls now await the US EIA weekly crude stockpiles data and the FOMC outcome for the next push higher.