WTI Oil Rallies Amid Transit Problems In The Black Sea

Key Insights

• WTI oil managed to gain strong upside momentum as traders focused on supply problems. 
• Gold rebounds after strong sell-off as the U.S. dollar pulls back after the disappointing Services PMI report. 
• Copper tries to settle above the $3.70 level as the upside trend stays strong. 

WTI Oil Gains Ground As Traders Focus On Transit Problems Through A Black Sea Terminal

WTI oil gained strong upside momentum today as traders focused on the potential disruption at the CPC Black Sea terminal, which exports oil from Russia and Kazakhstan. Yesterday’s comments from Saudi Energy Minister continued to provide additional support to oil markets.

About 1% of the global oil supply goes through the CPC Black Sea terminal, which may be forced to limit its capacity at 60-70%, according to Reuters calculations.

Meanwhile, Iran has reportedly dropped some of its demands for the nuclear deal, but markets remain skeptical as oil continues to move away from recent lows.

WTI oil managed to get above the 20-day EMA and is trying to settle above the $95 level. While WTI oil may face some resistance near $96, the nearest significant resistance level is located at the 50-day EMA near $98.50.

On the support side, WTI oil should get strong support near the $92 level. A move below this level will signal that WTI oil is ready to make another attempt to settle below $90.

Gold Rebounds As Dollar Pulls Back From Highs

Gold moved back above the $1750 level as the U.S. dollar found itself under strong pressure after the disappointing Services PMI report. The New Home Sales report, which indicated that New Home Sales declined by 12.6% month-over-month in July, put additional pressure on the American currency.

Meanwhile, Treasury yields moved lower, which was bullish for gold. In case gold manages to settle above the $1750 level, it will gain additional upside momentum and head towards the resistance level at the 20-day EMA at $1765.

Copper Tests New Highs As Traders Ignore Recession Worries

The disappointing economic data had no impact on copper, which made an attempt to settle above the $3.70 level.

The upside trend in copper markets stays strong, but it remains to be seen whether bulls will be ready to push copper to higher levels if global markets stay focused on recession risks.

For a look at all of today’s economic events, check out our economic calendar.