WTI pulls back amid possible US-Venezuela Oil dean amid Middle East tensions
- Potential US-Venezuela deal could ease sanctions on Venezuela's Oil industry, increasing global Oil supply.
- According to Reuters, the agreement aims for a "competitive, monitored presidential election" in Venezuela.
- Market sentiment influenced by the ongoing Middle East conflict between Israel and Hamas.
West Texas Intermediate (WTI), the US Crude Oil benchmark, retreats after testing the 20-day Exponential Moving Average (EMA) on news the US and Venezuela could reach a deal that would increase global Oil production amid times of geopolitical unrest in the Middle East conflict. Hence, WTI is trading at $86.96 per barrel after hitting a daily high of $88.29.
US Crude Oil benchmark retreats from 20-DMA on news of potential supply increase
News in the mid-North American session emerged that the US and Venezuela governments could sign a pact as soon as Tuesday that would ease sanctions on Venezuela’s Oil industry in exchange for a “competitive, monitored presidential election” in the country, according to Reuters. That would increase Oil supply and cap higher prices, following the output cut by Saudi Arabia and Russia.
In the meantime, market participants remain upbeat about the Middle East conflict between Israel and Hamas, which would remain confined to Gaza. Additionally, diplomatic efforts to arrange a ceasefire failed.
Aside from this, the US imposed sanctions on tanker owners carrying Russian Oil crude over the $60 per barrel limit imposed amid the conflict between Russia and Ukraine.
WTI Price Analysis: Technical outlook
Oil remains neutral to upward bias but capped below September’s 26 swing low of $88.24, which, once broken, could open the door for buyers to claim the current year-to-date (YTD) high of $94.9 before rallying to $100.00. Conversely, if sellers maintain prices capped below $88.00, that would open the door to test the 50-day moving average (DMA) at $85.53, followed by the October 12 low of $82.35.