Crude oil, as with the dollar and US stock indices, appears to be undecided about where it goes next. Just under a week ago, front-month WTI broke and held above $66 for the first time since last summer. But it repeatedly failed to push up beyond $67 as it ran into a long-term line of resistance. This has been building ever since crude oil hit the highs, which came soon after Russia’s second invasion of Ukraine four years ago.
WTI dipped back below $66 this morning, and time will tell if this is a touch of consolidation ahead of another attempt to rally and take out overhead resistance, or a precursor to the continuation of the four-year downtrend.
Source: TN Trader
Oil prices contain a premium said to be anything between $7 and $10 due to ongoing US–Iran tensions. Both sides are expected to hold a third set of meetings in Geneva this week to reach an accommodation over Iran’s nuclear ambitions. If these prove successful, then that premium could quickly evaporate.
If unsuccessful, then this premium may prove woefully inadequate, should Iran go ‘all in’ and target crude oil supply routes. In the meantime, data released last night from the American Petroleum Institute showed a significant build in US crude inventories.
