WTI Crude Drops on OPEC Outlook and Geopolitical Headlines, Testing Key Support

Yesterday’s close: Settled at 73.83, -1.73 [-2.29%]

ALERT – November Contract DTE: 7 

WTI Crude Oil futures were sold steadily through yesterday’s session as weekend risk-premia was retracted and OPEC reduced their forward demand estimates. During the official U.S. session, Crude futures settled down but within last weeks trading range. After settlement, around 3:30pm CST, the Washington Post released a story that came across the wires as follows:

*ISRAEL DOESN’T PLAN STRIKES ON IRAN OIL, NUCLEAR TARGETS: WAPO
*NETANYAHU TELLS US THAT ISRAEL WILL STRIKE IRAN MILITARY: WAPO

Oil futures were sold sharply on the headlines, moving $4 lower quickly.

This morning, crude is -3.00 from settlement and is trading at 70.86. WTI November futures bounced off the 70.00 level.

Israel has not confirmed or denied the Washington Post’s story, but Prime Minister Benjamin Netanyahu issued the following statement this morning: “We listen to the opinions of the United States, but we will make our final decisions based on our national interests”. Looking at the situation now, the Pentagon’s rare decision to deploy troops into Israel alongside a new U.S.-operated THAAD missile system to start this week starts to look like potential bargaining chips used to deter strikes on Iranian oil and gas assets. While the probabilities of these strikes are lowered, they are not lowered. 

From a technical standpoint, the quick move through our rare major four-star support level in November WTI Crude Oil futures was supported at the psychological $70 mark. We have our next rare major four-star support at 69.83-70.10, aligning with gap settlements and a retracement; a settle above this point could provide a solid entry for risk-defined long positions. However, continued price action below our Pivot and point of balance at..

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