As the crude oil prices experienced a significant selloff on Wednesday, slight correction in sentiment could be expected on Thursday, waiting for further news from the oil market.
At the time of writing, West Texas Intermediate (WTI) crude oil futures were seen trading 0.55% higher at the price of $70.75 a barrel. Brent crude oil futures jumped 1.72% to $74.66 per barrel.
WTI crude oil prices lost around $4 over Wednesday, trading now between the support line at $70.40 a barrel, successfully tested and the resistance of $71.
In case of further drops, support line may be tested at the price of $69.60 a barrel or even further at the price of $68.80.
On the other hand, resistance level may be seen at the price of $71.35, $71.60 or $72.30 level.
Wednesday was all about the Libya’s National Oil Corp declaration that four problematic terminals for oil exports are reopened again, helping the country to end with a standoff that decreased Libya’s production markedly.
This means that the country’s production of around 850K of barrels per day may return back to the market, helping to drag down prices.
Moreover, actual Trump’s policies are helping to support worries about the global demand as well, providing further bearish concerns to traders. Thus, any crude oil gains could be limited as the traders will wait for the outcome of different talks, mainly with focus on U.S. disputes with China, E.U. and Canada.
Nevertheless, U.S. demand looks healthy as the U.S. crude oil stockpiles dropped 12.6 million barrels over the week, reaching the lowest level since February 2015, according to the latest report from the Energy Information Administration (EIA). Partial contribution to such fall came from Cushing, Oklahoma, where the crude stocks dropped 2.1 million barrels.
Market is also starting to experience the removal of Iran out of the market as the U.S. crude oil exports to India reached their record in June even doubling the exports from previous year as the missing supplies from Iran and Venezuela are being replaced by United States.
U.S. administration has been pushing on its allies to isolate Iran as well, halting any crude oil imports from Iran by November while the U.S. production is putting efforts to fill the gap along with rising OPEC and Russian production.
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