WTI: volatility in play, moving up $71 handle, caped by 21-hr SMA

• WTI's minor correction extended with volatility in play.
• Potential sanctions against Iran, API-EIA reports behind the recent upside.

WTI has recovered up to the 21-hr SMA at $71.34bbls after recovering from $70.49bbls, pulling support from the 50-hr SMA within a day's range of between aforementioned low and $71.82bbls. All in all, markets are taking Trump's recent decision to axe the Iran nuclear deal.

WTI has been elevated on a number of geopolitical headlines and turmoil in Syria. The black gold rallied yesterday, extending gains following military action in the region of the Arabian peninsula. However, WTI weakened early today while Iranian Oil Minister Bijan Zanganeh told state television nothing noteworthy will happen to oil exports after the Iran sanctions. 

There was also a further rise in U.S. crude stockpiles, (reported by the API and the EIA) which supports the upside argument. However, it looks as though volatility is here to stay as traders try to foresee the implications of various geopolitical risks, especially as it will not be for at least six months before economic sanctions are imposed on Iran by the US - currently, that is seen as bearish for oil. Meanwhile, some of the air out of the dollar has also escaped with the DXY trading at the lower end of the 92.5410-93.1640 range. (There is an interesting development occurring between the dollar and the price of oil. Both markets are correlated, a dynamic that has only occurred 11 times since 1983.)

WTI levels

Bears can target $69.23 (10-day sma) ahead of  $68.47 (21-day sma) and before $66.86 (low May 1). On the upside, $71.86 (2018 high May 10) comes before $72.00 (psychological level).