WTI breaks higher to test $ 69 ahead of EIA data

• Bulls cautious heading into the EIA crude inventories report.
• Iran sanctions led supply risks, USD weakness appear to put a bid under the prices.

WTI (oil futures on NYMEX) stalled is bearish consolidative mode and broke higher to test the 69 handle in the mid-European session, as expectations of supply threats from the looming US sanctions on Iran offer the much-needed support to the bulls.

More so, broad-based US dollar weakness also helps put a bid under the black gold. A weaker US dollar makes the USD-denominated oil cheaper for the foreign buyers. The US dollar index drops -0.10% to trade just ahead of the 95 handle.

Further, expectations of a drop in the US crude stockpiles appear to buoy the sentiment around oil. This comes after the latest American Petroleum Institute’s (API) data showed that the US crude stocks fell by 1.17 million barrels to 404.5 million barrels in the week to Aug. 31.

However, it remains to be seen if the prices can sustain the bounce amid looming US tariffs deadline on the Chinese imports, as the public hearing for the US' $200 billion tariffs concludes today.

WTI Technical Levels

FXStreet’s Analyst Omkar Godbole, explains: “WTI could complete the head-and-shoulders pattern (on the daily chart) by falling to $64.75 (neckline support) in the over the next week. A daily close below $64.75 would confirm a head-and-shoulders bearish reversal and could yield a drop to $60.00 (psychological support). On the higher side, a close above $71.40 (Sep. 4 high) will likely send the bears packing, exposing the yearly highs above $75.00.”