- West Texas Intermediate crude keeps climbing on supportive fundamentals.
- Bulls target the 200-D EMA and 4HR 200 EMA.
August West Texas Intermediate crude, (WTI), on a spot basis, added to gains on Friday despite Baker Hughes data that showed that active U.S. drilling-rigs edged up by 1 to 789, following two consecutive weeks of declines. Instead, the focus remains on the Federal Reserve and Middle Eastern tensions that escalated up this week following an attack on a US Drone of which the U.S. blamed Iran for. WTI was ending the North American session over 0.5% at the midpoint of the $57 handle, up from $56.68 but shy of the highs at $57.96. As for futures, these were tallying a rise of nearly 9% for the week and highest settlement this month.
Loser monetary expectations and a dawn of a new easing cycle across various global economies are fuelling prospects of a pick up in activity, albeit in the face of continuing uncertainties on the international trade front. For the meanwhile, Iran/US noise is taking up a fair bit of the price action following fears of a deepening conflict and potential disruption to oil supplies due to this week’s escalation and prospects of a U.S. airstrike against Iran, however, these were called off at the last minute Thursday night, according to the New York Times.
Meanwhile, oil can also find support as we head towards the pending meeting between the Organization of the Petroleum Exporting Countries and its allies scheduled to take place on July 1-2 in Vienna. OPEC is poised to extend oil-output cuts for the rest of the year and Saudi Arabia, Iraq and the United Arab Emirates, the group’s three biggest members, all want to do so in a bid to buttress crude amid signs of faltering demand.
Capped at the weekly 20-Experiential Moving Average, WTI climbed through the 20-D EMA and has topped the 50-D EMA, now en -oute for the 200-D EMA and 4HR 200 EMA. A break there will expose the 30th May highs of $59.67 and of course the $60 psychological level. However, if the price can’t sustain a bid, bears can target back down to the 200 weekly EMA (this week’s low) and the 61.8% Fibo. A full breakdown opens prospects for a correction to back towards the14th Jan 50.41 low and then the 26th November lows at 49.44.