FXStreet (Mumbai) – Although WTI oil prices on NYMEX edged higher on Friday, the gains remain capped after the latest news from the EIA and Baker Hughes as well as the Iran agreement continues to weigh on the black gold.
WTI corrects higher
Currently, WTI trades 0.64% higher at 48.77, oscillating in a narrow range. The recovery in oil prices is expected to remain short-lived as global oversupply concerns over possible Iranian exports flooding the market coupled with rising inventory are likely to dampen investors’ sentiment.
The EIA published its US oil inventories report for the week ending July 17, showing a significant increase in US crude oil stockpiles by 2,468,000 barrels, confirming the poor demand for crude oil, compared to a strong supply.
While, Baker Hughes advised active oil rigs in the US were a paltry 638, much lower compared with the peak in October, when 1,609 oil rigs were active.
Moreover, broad US dollar strength on the back of correction after the recent weakness is also likely to weigh on the oil prices. The US dollar index – a virtual measure of the greenback’s power against its six major peers – stood 0.33% higher at 97.63.
WTI Oil Technical Levels
WTI oil has an immediate resistance which stands at 50 levels above which gains could be extended to 51.58 levels. Meanwhile, support is seen at 48 levels from here losses could be extended to 46.50 levels.
(Market News Provided by FXstreet)