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FxWirePro: WTI likely to retest $65 area amid Middle East tensions

Expect a higher oil price.

  • As the Trump administration turns its screw on Iran, ratcheting up tensions in the Middle East, expect the oil price to once again move higher. While Saudi Arabia and OPEC has a spare capacity of almost 2 million barrels, OPEC members have announced that they do not intend to breach the production agreement reached between OPEC and Russia-led Non-OPEC countries last November, when countries agreed to reduce production by 1.2 million barrels per day, creating a supply shortage in the cash market.

Trade idea:

  • Our calculations at FxWirePro strongly suggest that North American benchmark WTI would move higher to retest recent high around $66.5 area. However, the advancement is likely to face heavy selling around $64 area, and $65.3 area.
  • Market Data
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