WTI: Saudi-led rally stalls, back on 71 handle

• Demand growth concerns and trade tensions offset US-Saudi geopolitical woes.
• Focus on Tuesday’s API crude stocks report for fresh trading impetus.  

WTI (oil futures on NYMEX) reversed gains and fell back below the 72 handle, as concerns over the long-term demand outlook re-emerged and dampened the investors’ sentiment.

The black gold kicked-off the week with a bullish gap and rallied to two-week tops of $ 72.70, as the Asian traders reacted to latest geopolitical tensions between the US and Saudi Arabia.  

The US President Trump threatened “severe punishment” if it found that Saudi Arabia killed the Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul. On Sunday, The Kingdom said it would retaliate to any measures against it over the Khashoggi case.

However, the upside was limited, as Friday´s International Energy Agency, in its monthly oil report, cut its forecasts for world oil demand growth this year and next. In the week ahead, the focus remains on the US weekly fuel stocks data due to be published on Tuesday and Wednesday for the next direction on the prices.

WTI Technical Levels

According to Swissquote Bank Research Team, “Long positions above 71.30 with targets at 72.70 & 73.60 in extension. Below 71.30 look for further downside with 70.90 & 70.50 as targets. The RSI is supported by a bullish trend line. “