WTI RISES AFTER THE U.S. ANNOUNCES PLANS TO TIGHTEN SQUEEZE ON IRAN
WTI Crude futures are currently trading at $65.43- higher by 2.21% as compared to the previous closing price. The contract rose to $65.95, its highest level since 31st October earlier in the session.
Brent crude futures were trading at $73.74-higher by 2.55% as compared to the previous closing. The contract rose to $74.31, its highest level since 1st November earlier in the session.
Crude prices rose today as the U.S. announced that it will eliminate in May all waivers granted to eight countries allowing them to buy Iranian oil without facing U.S. sanctions. The decision was taken by President Donald Trump. The White House also said that the U.S. was working with Saudi Arabia and the UAE to ensure the oil market is adequately supplied.
U.S. Secretary of State Mike Pompeo reiterated that Washington’s goal was to bring down exports of Iranian oil to zero. He also said the U.S. had no plans to give any grace period beyond 1st May for countries to comply.
On 5th November, the U.S. restored sanctions on exports of Iranian oil after President Trump unilaterally pulled out of the nuclear agreement between Iran and six world powers.
Another drop in Iranian exports would further squeeze supply in a market already tightened through the U.S. sanctions against Iran and Venezuela, and voluntary cuts led by the OPEC.
U.S. energy services firm Baker Hughes said in its report on Thursday that the U.S. energy firms last week decreased the number of rigs looking for new oil by 8 to 825 for the week ended 18th April.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 19th April on Tuesday. Previously, the API reported that U.S. crude supplies fell by 3.096 million barrels for the week ended April 12. The EIA will report US crude inventories for the week ended April 19 on Wednesday. Previously, the EIA reported that U.S. crude inventories fell by 1.396 million barrels for the week ended April 12.
On the technical front, the RSI is currently at 71.7% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands and is heading upwards.
Overall Bias is Positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Buy At 65.30 Take Profit At 65.90 Stop Loss At 65.00