Crude oil was a touch firmer overnight. A look at the daily chart (above) suggests that there’s still some downward pressure on prices. As far as front-month WTI is concerned, the first significant area of support comes in around $61.50 per barrel.
Source: TradingView
This has held as support since June this year. But yesterday, sellers managed to take WTI back down towards this region, suggesting that a more serious retest may not be far away.
Fundamentally, it looks as if additional supply is on the way following an agreement between Iraq and the Kurdish regional government to reopen an existing oil pipeline for the first time in two-and-a-half years. But this news wasn’t enough to trigger further selling.
Looking at supply and demand more generally, analysts say that it is becoming increasingly difficult to find accurate data on which to base their calculations. But satellite analysis of shipping suggests that the world continues to be well supplied by energy products, and crude must compete with Liquid Natural Gas and renewables.
Meanwhile, the outlook for demand growth continues to be cloudy, suggesting that crude prices could remain relatively cheap for some time to come.
