Oil has been slowly edging lower after Saudi Arabia said it is working to restore about half the capacity of its damaged cross-country pipeline within days. Trump also told reporters the US is nearing the end of the war with Iran and is expected to meet Gulf leaders in New York next Tuesday, adding to signs of possible de-escalation.
Oil has been slowly edging lower since yesterday after Saudi Arabia said it was seeking to restore about half the capacity of its cross-country pipeline within days, easing some of the recent supply fears in crude oil markets.
Saudi Aramco targets partial pipeline restart
Saudi Aramco said it was working to bypass a damaged section of the route, which would let it resume part of the pipeline's capacity. The company is aiming to restore the pipeline to full capacity in about six weeks.
Trump signals shift on Iran war
Trump told reporters yesterday that the US was "hopefully toward the end" of the war with Iran, adding that he has spoken with Tehran directly. This marks a shift from his previous hawkish comments that the war would not end until after the midterms. Maybe $100 oil, rate hikes, and elevated bond yields are putting more pressure on Trump to get out of this mess.
He is also expected to hold a meeting with Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss next steps in the war with Iran, according to Axios. Last year, Trump met during the UN General Assembly with leaders from eight Arab and Muslim countries and presented them with his draft Gaza peace plan, going public with it a week later; a deal to end that war was reached shortly afterward.
Technical picture holds near resistance
Taken together, these are signals of potential de-escalation that might keep oil prices in check for now around recent highs. Stronger signs of de-escalation would likely trigger a selloff, so traders are staying focused on incoming news from the Middle East.
On the daily chart, crude oil rejected the key resistance zone around the 105.00 level and pulled back. Sellers stepped in around the resistance, positioning for a drop toward the lower bound of the channel near the 85.00 level, while buyers need a break above resistance to push toward the 111.00 handle. Later today, traders will also watch US jobless claims figures.
Source: Investinglive
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