WTI ranging in the $58-60/bbl region with uncertain outlook

• Market remains concerned that weak demand growth and rising non-OPEC supply will keep crude markets from tightening.
• Bulls look to the 59 handle which has so far proven resilient.

WTI is a touch lower in Asia, down -0.30% at the time of writing, sliding from the session high of 58.47 to a low of 58.28. The price is consolidating the recent spike and correction from the 63 handle which occurred following the news of attacks on Saudi oil facilities at the start of last week. 

Due to the growing tensions in the Middle East, West Texas Intermediate crude prices were supported overnight and the futures contract for November delivery on the New York Mercantile Exchange added 55 cents, or 1%, to settle at $58.64 a barrel. 

"Despite warnings from the Houthis on the potential for a second Iranian strike on Saudi oil infrastructure, reports that Aramco's struck assets could fully restore production by early next week are weighing heavily on crude oil prices," analysts at TD Securities explained. 

"The market remains concerned that weak demand growth and rising non-OPEC supply will keep crude markets from tightening, and while participants are anxiously awaiting an announcement from the Saudis on the geographic location of the cruise missiles launches, prices appear to be discounting a peaceful resolution to the crisis. In this context, crude oil is not ripe for unconditional love, and we suspect that WTI prices ranging in the $58-60/bbl region seem appropriate for now."

WTI levels

Bulls look to the 59 handle which has so far proven resilient. Failures here opens the case for a run back towards the 61.8% Fibo and August resistance just below the 57 handle. On a re-escalation of fundamentals, the April highs at 66.58 will be a key target.