WTI clings to fresh 7-week high amid US-Iran tension, declining inventories

• The US prepares to strike Iranian targets in Syria.
• More than expected draw in the US crude inventories also pleases energy buyers.
• Doubts over the US-China trade deal act as a barrier to the north-run.

Rumours concerning the US readying an air strike over Iranian targets in Syria joined previously upbeat sentiment for energy traders, based on more than forecast draw in the US Crude Oil Stocks. As a result, WTI trades near $60.50, fresh 7-week high during early Thursday.

As per the US Energy Information Administration’s (EIA) Crude Oil Stocks Change for the week ended on July 05, the inventory level fell behind -3.081 million barrels to -9.499 million barrels. The official stockpile data helped oil buyers to hold on previous bias based on the private industry survey.

After the inventory data, rumours broke that the US is ready to strike some part of the Iranian targets in Syria.

Although the rumours failed to portray any strong market reaction immediately, confirmation of the same can add further pessimism surrounding the US-Iran relations that have gone bitter off-late. The Middle East nation has openly shown readiness to avoid global nuclear deal and the US is trying best to compress the Hassan Rouhani-led economy.

Against the momentum is uncertainty surrounding the US-China trade relations that weigh over the future demand of energy products.

Technical Analysis

May 13 low near $60.65 acts as immediate resistance for the energy benchmark, a break of which can propel prices toward $63.00 and May month high around $63.80. Meanwhile, $60.00 and $59.30 may offer adjacent support ahead of highlighting the 200-day simple moving average (SMA) level of $58.00.