Yesterday U.S. sanctions against OPEC member Iran officially came into effect. The sanctions were not aimed at Iran’s oil exports instead they target Iran’s U.S. dollar purchases, metals trading, coal, industrial software and auto mobiles. U.S. sanctions on Iran’s oil exports have been given a 180-day “wind-down period” and will be enforced on the 4th of November. US President Donald Trump made it clear through his twitter account that any country doing business with Iran will NOT be doing business with the United States adding even more emphasis to the matter. Oil prices rose on Tuesday however intensifying concerns on further developments on the matter could affect the market economically and geopolitical.
Crude Oil rose yesterday, breaking the 69.54 resistance level and corrected back below that level later on. It must be noted that in August, most of Crude Oils movement has been between our 69.54 and the 68.43 Support level. Technically, the RSI indicator in the 4 hour chart remains near the reading of 50, implying a rather indecisive market. Should traders favor WTI long positions, we could see the commodity breaking the 69.54 resistance line and aim for the 70.57 resistance level. On the flip side, should traders favor WTI short positions we could see it aiming for the 68.43 support line and aim even lower. Further support may be provided today for Oil prices as the EIA Crude oil weekly figure is forecasted to release drawdown of -3.33 M barrels.