Crude Oil Gains on a Softer USD

Crude oil

WTI crude oil’s technical posture is currently bearish below major moving averages.

Crude oil prices began the new week rising as it found support on a softer USD and supply concerns. However, West Texas Intermediate (WTI) and Brent crude prices were seen pulling back in today’s Asia-pacific trading.

A breakdown in negotiations between Tehran and Washington helped increase gold prices. Iran’s response to a proposal presented by the European Union disappointed Western leaders.

Iran wants an investigation by the International Atomic Energy Agency (IAEA) to be stopped. On Monday, US Secretary of State Anthony Blinken said a near-term deal is “unlikely.” The commentary caused WTI to reduce its losses by nearly a full percentage point.

German Chancellor Olaf Scholz also shared Mr. Blinken’s sentiment. Israel is said to have shared intelligence that Iran is very close to having enough weapons-grade uranium for a bomb.

China’s Covid-19 lockdowns also affect oil demand. This morning, the National Health Commission reported 1,048 new cases for September 12. Beijing might not ease its stance on controlling Covid before October, as that is when President Xi Jinping is expected to secure a third term in office. Although, there are speculations that a gradual easing of restrictions would occur in the months following the National People’s Congress (NPC).

Traders are expecting the inventory data, which is due in a few days. Today, the American Petroleum Institute (API) will report crude oil stock data for the week ending September 09. The Energy Information Administration’s data, which typically has more influence on markets, is due out the day after. Analysts expect the EIA data to show a 200k barrel reduction in crude oil stocks and a 633k barrel build in distillate stocks.

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