WTI Crude Oil Daily Analysis – September 4, 2017

Crude oil prices dipped lower on Friday and continue to trade lower on Monday morning as prices were highly unpredictable following Hurricane Harvey which knocked out refineries along the Gulf of Mexico coast. This has led to a drastic supply gap of fuels like gasoline.

Traders were closely watching the progress in North Korea, where the nuclear test conducted by the North Korean military over the weekend was the sixth and most powerful nuclear test. The government announced – it was an advanced hydrogen bomb for a long-range missile, prompting the threat of a “massive” military response from the United States if it or its allies were threatened.

According to the federal Bureau of Safety and Environmental Enforcement – about 5.5% of the U.S. Gulf of Mexico’s oil production, or 96,000 barrels of daily output, remained shut on Sunday.

Analysts predict that it will likely take months to return to normal operations despite efforts which were put on by U.S Gulf drillers, refineries and fuel pipelines for restarting operations.

Technical Outlook

The 4H intraday chart has formed a “Falling wedge pattern” as prices trade near resistance at $47.30 which is a crucial area.

A break above and a close of a one-hour candle could change the momentum to the upside at $49-$50. On the other hand, if it’s unable to break above, then further downside pressure would push prices towards $46-$45.