WTI pushes towards $69.00 as US dollar retreats

WTI pushes towards $69.00 as US dollar retreats

WTI looking to slip below $67.00 on a shift in the supply-demand relationship.

Aramco cuts October OSPs to Asia by $1 per barrel.

80% of oil output in the Gulf of Mexico still remains offline.

WTI is trading above the $68.90 mark after slipping from $69.50 on Monday, as Saudi Arabia cut its October official selling prices (OSPs) to Asia by at least $1 per barrel.

WTI might slip further toward $67.00 on weak global demand and if the US dollar index (DXY) retraces further towards the 93.00 mark.

Nearly 80% of oil output in the Gulf of Mexico still remains offline, a week after Hurricane Ida hit the region.

About 1.5 million barrels per day of oil production in the Gulf remains shut, along with 1.8 billion cubic feet per day of natural gas also down.

On the other side, the Organization of Petroleum Exporting Countries and its allies (OPEC+), are said to be raising output by 400,000 barrels per day, starting September, despite weak data from China and the US raising demand concerns.

WTI had dropped on Friday after a weak US jobs data rose concerns over its demand due to sluggish recovery. A cap on the Gulf of Mexico oil output due to Ida, checked on prices dropping further.

WTI price action will also take cues from the Energy Information Administrations (EIA) Crude Oil Stock Change, set to be released on Wednesday.

A further reduction from earlier 7.169 million barrels could push prices higher toward $74.00, the July 30 high.

Technical levels

WTI is trading around $68.80 as immediate resistance is seen at $70.50, Sep 2 high, while support is around $67.00, Sep 1 low.

A break below $67.00 will open door to drop toward $65, which is the 61.8% Fibonacci retracement of the rally between $61.80 and $70.50 respectively.