CRUDE OIL BULLISH AS INVENTORIES DECLINE
WTI Crude Oil is currently trading at 67.41-higher by about 2% from the last closing. WTI crude oil rose on Wednesday after an industry report showed a sharp drop in U.S. crude inventories and U.S. sanctions on OPEC producer Iran pointed to tighter supplies. In the week ended 17thAugust, the WTI declined 3.7% as compared to the previous Friday’s closing price.
Crude Oil has also found support from a weak dollar, which has slipped this week in response to U.S. President Donald Trump’s comment that he was “not thrilled” by the Federal Reserve’s interest rate increases.
Also, Brent Crude Oil hit a two-week high above $74 a barrel on Wednesday. Brent crude rose $1.38 to $74.01 a barrel and reached $74.19, the highest since Aug. 8.
The American Petroleum Institute reported on Tuesday that U.S. crude stocks fell last week by 5.2 million barrels, more than three times the decline expected by the markets.
Meanwhile, European oil companies have started to cut back on Iranian purchases, although Chinese buyers are shifting their cargoes to Iranian-owned vessels to keep supplies flowing.
On the technical front, the RSI is currently at 50.21% and suggests that the market can move in the upward direction. The %K has crossed the % D from below to the upside at 11.18%, and this suggests that the market may head upwards. The current price is above the MA5. So, overall the market setup seems to be positive.
Trade Suggestion-Limit Buy At: 67.00, Take Profit At: 67.70 Stop Loss At: 66.65