WTI Oil Retreats Amid Signs Of Progress In Nuclear Deal Negotiations

Key Insights

• Crude inventories declined by 3.3 million barrels, while domestic oil production decreased from 12.1 million bpd to 12 million bpd.
• The EIA report had little impact on the market as traders focused on the Iran nuclear deal. 
• Bulls are worried that the U.S. and Iran may finally reach a consensus on the nuclear deal. 

WTI Oil Is Losing Ground As WSJ Reports That Chances For Iran Nuclear Deal Increase

WTI oil is losing some ground after the release of the EIA Weekly Petroleum Status Report, which indicated that crude inventories declined by 3.3 million barrels. Analysts expected that crude inventories would decrease by 0.9 million barrels.

Gasoline inventories remained unchanged, while distillate fuel inventories declined by 0.7 million barrels. Importantly, domestic oil production declined from 12.1 million bpd to 12.0 million bpd. At this point, it looks as though domestic oil production reached a top near the 12.2 million bpd, which is bullish for oil markets.

Meanwhile, traders continue to monitor the situation with the Iran nuclear deal. The recent comments from Saudi Energy Minister, who said that OPEC+ may cut production, indicate that there is a decent chance for the deal. In this scenario, extra oil from Iran will appear in the market in a few months.

Wall Street Journal has recently reported that negotiators are close to a deal. The market is a bit nervous, but there is no real sell-off. The news about the deal will determine the dynamics of oil markets in the upcoming hours.

WTI Oil Faced Strong Resistance Near $96

WTI oil made an attempt to settle above the $95 level but faced strong resistance near $96 and pulled back. The market will be news-driven today, so WTI oil may easily move between levels.

The 20-day EMA will likely serve as a significant support level for WTI oil. In case WTI oil manages to settle below the 20-day EMA, it may gain strong downside momentum.

All in all, traders should be prepared for volatility as news about Iran’s nuclear deal may be released at any time.

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