WTI catches fresh bids, re-takes $ 68.50 on Iran sanction worries

• Middle East tensions outweigh US crude inventories build.
• Focus shifts to US durable goods, GDP data for the next push higher.

WTI (oil futures on NYMEX) is making headways towards the $ 69 threshold, as a dip in the 10-year Treasury yields to the 3 percent resistance-turned support lifted the demand for the alternative higher-yielding asset – oil.

Moreover, the renewed geopolitical concerns, with the US considering re-imposing sanctions against Iran, also underpinned the sentiment around the black. Furthermore, a decline in the Venezuelan crude oil output also collaborated to the fresh leg higher.

Venezuela’s crude production has fallen from almost 2.5 million barrels per day (bpd) in early 2016 to around 1.5 million bpd due to political and economic turmoil, Reuters reports.

However, further upside appears limited, in the wake of the bearish US EIA crude stockpiles report, which showed that the US crude inventories rose by 2.2 million barrels in the week to April 20, to 429.74 million barrels.

WTI Technical Levels

According to Slobodan Drvenica at Windsor Brokers Ltd, “Wednesday’s repeated downside rejection left double-top at 67.12/10, which also marks formation of higher base after a pullback from new high at $69.54 stalled. Repeated close above rising 10SMA which tracks ascend in past two weeks, was another positive signal.”

“Today’s recovery extension retraced over 50% of $69.54/$67.10 pullback, with close above $68.61 (Fibo 61.8%) needed to generate stronger reversal signal. Ascending 10SMA offers solid support (currently at $67.80) which is expected to hold and keep bullish near-term stance intact. Res: 68.61; 69.00; 69.36; 69.54 Sup: 67.95; 67.80; 67.53; 67.10,” Slobodan added.