WTI drops below $60.00 on US readiness to meet Iran with conditions
- WTI fades bounce off $59.79 to refresh intraday low.
- US official cites readiness to meet Iran on return of 2015 deal, EU hosted talks.
- Chatters over the year’s lowest crude supplies seem to fade even as EIA marked heavy drop in stockpiles.
- No major progress on US stimulus, doubts over vaccines capacity to tame virus strains challenge the mood.
WTI drops below $60.00 to refresh intraday low to $59.78 during the initial Asian session on Friday. In doing so, the energy benchmark follows the news from the US suggesting the reduction in the Washington-Tehran tensions.
As per Reuters, an anonymous US official mentioned the American readiness to meet Iran. However, the preconditions include Tehran's return to the 2015 Nuclear Deal and Europe’s hosting of the talks.
This means a reduction in the US-Iran tension and fewer challenges to the oil output as needed to overcome the latest supply drop due to the cold wave in Texas.
Even so, the output worries from the Persian Gulf join the downbeat inventory numbers to keep the oil buyers hopeful. As per the latest inventory data from the US Energy Information Administration (EIA), US Crude Oil Stocks dropped below -2.429M forecast to -7.258M for the week ended on February 12.
It’s worth mentioning that the latest comments from US Treasury Secretary Janet Yellen and House Speak Nancy Pelosi highlight the need for stimulus and hence the next week’s planned progress for US President Joe Biden’s $1.9 trillion covid relief package lures the oil buyers. Alternatively, doubts over the top-tier vaccines’ capacity to tame the covid variants, especially from South Africa, challenge the commodity prices.
Moving on, China’s return to the markets should entertain energy traders but a lack of major data in Asia may restrict the moves ahead of February’s preliminary activity numbers for the US.
Technical analysis
Pullback moves need validation from $59.40-30 area comprising 10-day SMA, weekly low and highs marked during late January 2020.