WTI crude oil benefits from supply concerns

WTI crude oil is settling at $97.01. That is the highest since July 29. The settled price is also back above the 200 day MA at $96.02.

Continuing clashes in the Libyan capital, Tripoli, are threatening oil supply, moreover, the OPEC+ meeting is also a concern as Saudi Arabia has threatened production cuts. Recent inventory data showed larger drawdown of inventories. A counter to the upside is a potential nuclear deal with Iran which could add 1M BPD to the market.

Earlier on Monday, WTI oil moved above the $96 level as traders focused on protests in Iraq. The protests were triggered by Shi’ite Muslim cleric Moqtada al-Sadr, who said that he “would quit politics”. Protesters have already stormed Iraq’s Republican Palace.

Traders shifted their focus from recession worries to supply issues in recent trading sessions. The news from Iraq provided significant support to oil markets, and traders will likely stay focused on the developments in the country in the upcoming trading sessions.