WTI: Rebound stalls above $63 despite likely Iranian retaliation
- WTI bulls fighting back control amid plans of Iranian retaliation.
- The bounce lacks follow-through on Mid-East risks reassessment.
- Risk recovery caps the downside in oil ahead of API data.
WTI (oil futures on NYMEX) is struggling hard to extend its minor recovery above the 63 handle in the European session, as markets await further details on a potential retaliation from Iran against the US assassination of the Iranian Major-General Qassem Soleimani in Baghdad last Friday.
Although the Iranian media reports that Iran is said to be assessing 13 retaliation 'scenarios' against the US did help the black gold to extend the bounce from Asian session lows of $62.38. However, the bulls appear to lack vigor, also as markets continue to recalibrate the risks from the US-Iran geopolitical disruption.
Meanwhile, the corrective downside in the barrel of WTI remains cushioned, as the risk sentiment has improved, as suggested by higher global equities, Wall Street futures and Treasury yields.
Further expectations that the US crude oil stockpiles likely dropped last week for a fourth week in a row, as revealed by a Reuters poll, also lend support to the prices. The next move in the commodity remains at the mercy of the developments surrounding the Mid-East, as the weekly US Crude Stocks data from the American Petroleum Institute (API) is eyed for near-term trading impetus.
WTI Technical levels to consider