WTI surrenders $ 70 ahead of Trump decision on Iran, down -1.30 percent

• Oil markets jittery ahead of Trump decision on Iran.
• Technical set up points to further upside.

Having faced rejection just shy of the $ 71 mark, WTI (oil futures on NYMEX) witnessed a steep drop in the US last session, now looking to extend the drop below the $ 70 handle, as markets remain jittery ahead of the US President Trump’s decision on Iran nuclear deal due to be announced at 1800 GMT today.

The sell-off in the barrel of WTI can be also seen as a profit-taking slide after the rates touched the highest levels since November 2014 at $ 70.81. Also, oil traders prefer to remain on the back seat ahead of the API’s weekly crude oil inventories data.

However, the API data is likely to play a second fiddle to the Trump’s announcement, as investors await the decision on whether the US would re-impose sanctions on Iran. Analysts at Barclays noted: “Trump is likely to either announce he will not be renewing a waiver on sanctions or will restate his opposition to the nuclear agreement.”

Should Trump pull the US out of a multi-nation deal on Tehran’s nuclear program, the Iranian crude exports could be hit, adding to tightness in the oil market, which in turn could offer extra legs to the ongoing rally in oil prices.

WTI Technical Levels

Omkar Godbole, Analyst at FXStreet notes: “Last week's bullish outside-week candle (engulfed previous week's doji) signals continuation of the rally from the June 2017 low of $42.06, also adds credence to the ascending (bullish) 5-week moving average (MA) and the 10-week MA and has opened the doors to $75.00 - $75.21 (100-month MA).”

“Only a daily close below the ascending (bullish) 10-day MA would neutralize the immediate bullish outlook. A daily close below $66.86 (May 1 low) would indicate a short-term bullish-to-bearish trend change,” Omkar adds.