WTI down 1% on stronger USD, sub-$ 68 ahead of API

• Sell-off extends as USD buying picks-up pace across the board.
• US-Iran row fails to lift the sentiment, as focus shifts to API crude inventory data.

WTI (oil futures on NYMEX) is seen replicating the moves seen in the European session a day before, as broad-based US dollar strength remains unabated amid better US growth outlook and faster pace of Fed tightening. The USD index jumps to 92.19, the highest levels seen since January, up +0.38% on the day.

The barrel of WTI gave back more-than-half the yesterday’s rebound triggered by Israeli Prime Minister Benjamin Netanyahu comments. The Israeli PM urged the US to pull out of the 2015 nuclear deal with Iran. The US-Iran nuclear spat points to prospects of supply disruption should the US reimpose sanctions against Iran.

All eyes now remain on the American Petroleum Institute’s (API) weekly crudes stockpiles data for fresh momentum on the prices. The US crude inventories likely rose by 1.3 million barrels last week, while gasoline and distillate stockpiles fell, a preliminary Reuters poll showed on Monday.

WTI Technical Levels

According to FXStreet’s Analyst, Joshua Gibson, “WTI continues to maintain buoyancy, clattering against the ceiling as the fossil fuel trades into three-year highs as oil bulls set their sights on the 70/barrel level. The current ceiling blocking the way to new multi-year highs is the 69.50 level, with support from the last swing high at 66.50 and further down at April's low of 61.80.”