WTI back below the key $48 psychological handle

WTI lost some ground on the API data and dropped back below the $48 handle. Earlier, WTI was rallying from $46.75 with the dollar falling behind the market's appetite along with US yields on the floor. However, the API data sent the black gold lower.

Forex today: dollar very soft and yields much lower again

• Crude -4.62mm
• Gasoline +4.08mm
• Distillates +1.75mm
• Cushing - 5.6mm

Saudi Arabia and three other countries cut ties with Qatar yesterday, raising uncertainty about Middle East oil production. However, the tensions seem to have cooled - it is unlikely that the nation would want to escalate problems on its doorstep with the Saudis and would aim to diffuse the situation rather than escalate it. The demand came in at $47.70 and the break of the $48 handle is a drawing the bid again for a retest of the level. WTI can target $48.20 and $49.00 with resistance at $48.90/99.  However, should selling resume, the 47.50 level guards 47.00 and 46.50 for new lows for the month and a resumption of the 24th May bearish channel.