WTI catches fresh bids, regains $ 68 ahead of API data

• Underpinned by rising US-Iran geopolitical tensions, as WTI approaches $ 68.50.
• Will the bounce sustain ahead of the API crude stockpiles data?

WTI (oil futures on NYMEX) caught a fresh bid-wave in the European session and rallied nearly 50 cents, extending its bounce from near $ 67.60 demand zone.

Focus on US-Iran tensions

The barrel of WTI is seen reversing yesterday’s slide so far this Tuesday, as the bulls were offered respite by the escalating geopolitical tensions between the US and Iran, after the Iranian Foreign Ministry noted that Iran will respond with equal countermeasures if the US attempts to block its oil exports. Mounting US-Iran row raises supply disruption concerns from the OPEC’s no.3 oil exporter, Iran.

More so, expectations of a drawdown in the US crude stockpiles in the last week also collaborates to the renewed strength seen in oil prices. A Reuters survey on Monday estimated on average that total US crude oil stocks fell about 3.2 million barrels last week, after unexpectedly rising in the week to July 13.

However, further upside may remain limited amid lingering US-China trade tensions and the prospect of slower economic growth that could hit the global energy demand.

Attention now turns towards the American Petroleum Institute (API) crude inventories data scheduled for release at 2030 GMT later on Tuesday.

WTI Technical Levels

According to Russell Shor, CFTe, MFTA, WTI “The chart shows hourly price action. Key resistance may potentially be at the confluence of factors including the central pivot level (P), price congestion resistance (green rectangle) and the 38.2% Fibonacci retracement level. The stochastic also needs to move to more seller friendly levels (green ellipse). A pullback in US Oil may provide a “sell the rally in a downtrend” opportunity.”