Demand supply equation hurts intermediary WTI crude bull sentiments again

As per our forecasts, we all have seen last month that WTI crude oil futures (CL!1) extended its loses from last month's highs at around 59 levels to 47.44 in first stage and again below 42.22 levels (our 2nd target) and even upto 37.75 levels when we advocated shorting futures. Currently, on NYME, WTI crude oil futures for September delivery slumped 3.8 dollars from last week's highs to trade at $45.53 a barrel during Europe mid-day hours.

Oil prices have been under heavy selling pressure in recent months amid concerns over a growing glut in world markets. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the OPEC last year not to cut production.

Crude inventory levels: We believe today's extended losses evidenced only due to the data release of US oil inventory levels. Prices spiked to $49.33 (last week's high) but could not sustain owing to the release of the inventory data which unexpectedly rose to an upbeat 4.7 million from previous -5.5 million as reported by the U.S. Energy Information Administration.

Iran's nuke pact: Barack Obama has got full support from his peers in the whitehouse regarding recent nuke deal with Iran. This nuclear deal with Iran brings in plenty of headwinds along with it for oil prices as oil mining country seems to have robust exporting capacity. So, it is quite believable that supply equation can spoof up to the prevailing situation of crude.