WTI struggles for direction around $60.00

• WTI alternates gains with losses around $60.00.
• Crude oil remains under pressure as geopolitical tensions ebb.
• EIA reported an unexpected build in US supplies on Wednesday.

Prices of the barrel of West Texas Intermediate remains under pressure and are gyrating around the key $60.00 mark on Thursday.

WTI weaker on US-Iran, data

The barrel of WTI is now exchanging gains with losses in the $60.00 neighbourhood, looking to regain some poise after Wednesday’s sharp sell of more than 4% to levels just above the $59.00 handle.

Easing concerns in the Middle East continue to weigh down on prices and prompt traders to keep unwinding long positions while reassessing at the same time the real impact of the US-Iran conflict on the oil market.

Adding to traders’ worries, the EIA unexpectedly reported a 1.16 M barrel build during last week on Wednesday, as opposed to the API’s reported drop the day before.

What to look for around WTI

The US-China trade developments have been relegated to a secondary role as driver of the price action in the oil markets in favour of the (now diminished) effervescence in the Middle East. However, traders appear to have somewhat overestimated the potential consequences of the US-Iran conflict, particularly in regard to supply disruptions. That, plus the fact that both countries have dialled down a probable bigger confrontation in past hours, have quickly dragged prices from multi-month peaks in the proximity of the $66.00 mark per barrel to the boundaries of $59.00, leaving them vulnerable and exposed to further weakness.

WTI significant levels

At the moment the barrel of WTI is losing 0.38% at $59.74 and a break below $59.16 (2020 low Jan.8) would open the door to $58.40 (55-day SMA) and then $57.79 (200-day SMA). On the upside, the next hurdle aligns at $60.84 (21-day SMA) seconded by $65.66 (2020 high Jan.8) and finally $66.60 (2019 high Apr.23).