WTI clinches $ 71 on Iran deal fallout, highest since November 2014

• What’s next after US oil reaches $ 71, fresh 3.5 year tops.
• Will the rally sustain amid broad USD strength?

WTI (oil futures on NYMEX) extends its bullish momentum into a sixth day today, reaching the highest levels since November 2014 at $ 71.16 after the US quit a nuclear deal with Iran and announced sanctions against the OPEC’s third-biggest oil exporter.

The barrel of WTI is last seen exchanging hands around the 71 handle, as expectations of tightening global supplies continue to underpin the sentiment. Markets believe that the US will re-impose sanctions on the Iranian exports of oil to Asia and Europe, which will help to ease the global supply glut, in turn supporting oil prices.

According to Reuters, analysts’ estimates of the possible reduction in Iranian crude supplies as a result of any new U.S. sanctions range from as little as 200,000 bpd to as much as 1 million bpd, with most impact from 2019 as sanctions take time to impose.

Looking ahead, the black gold will continue to get influenced by the Trump’s decision ahead of the US EIA weekly crude inventories report.

WTI Technical Levels

Slobodan Drvenica at Windsor Brokers notes: “Bullish techs reinforce positive sentiment for further gains as fresh bullish acceleration approaches the initial target at $71.61 (Fibo 161.8% projection of the upleg from $66.84 trough). Break higher would expose $72.24 (Fibo 200% projection), with bulls capable of traveling to next key barrier at $76.35 (Fibo 61.8% of 107.45/$26.04 Jun 2014 / Jan 2016 fall). Rallies could be interrupted by corrective dips on overbought conditions which are expected to provide better buying opportunities.
Rising 10SMA (currently at $68.92) is expected to contain extended dips and keep the bullish structure intact.”