WTI Crude Oil Daily Analysis – October 16, 2017

Crude oil market settled higher on Friday and continues to trade higher on Monday morning as investors react to the Iraqi military action and the US sanctions against Iran. The drop in rig count also supported the rise in prices.

WTI crude oil gained 0.97%, to trade at $51.95 as of 8:15 GMT.

Main worries are about the instability of Iraq, the second biggest oil producer within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia.

According to official sources, on Sunday, Iraqi forces began moving toward oil fields and an important air base held by Kurdish forces near the oil-rich city of Kirkuk, Iraqi and Kurdish.

Baker Hughes energy services revealed on Friday that, the Drillers cut five oil rigs in the week to Oct. 13, bringing the total count up to 743, the lowest since early June.

Technical view

Crude oil prices are expected to reach the upper parallel line at $52.42 which is a resistance line, although prices took strong support at $50. The 50-day  moving average will be the trailing support line at $50.4. It is likely that crude oil prices will be in a range-bound market over the near-term as prices are ready to form Rectangle chart pattern. An early break above resistance line at $52.45 can signal a bullish momentum.

It may take time to break above; meanwhile, crude oil prices could travel between $50 to $52 levels. The border upper parallel line will act as a resistance and lower parallel line as support.