Labor Strike, Political Unrest Fanning Tight Supply Concerns

Norwegian offshore workers started a walkout on Tuesday that would lower the amount of oil and gas produced, the union in charge of the industrial action told Reuters.

America West Texas Tuesday's little increase in intermediate crude oil futures is being attributed to growing supply shortage concerns. A strike by Norwegian workers and political upheaval in Libya are fueling these worries.

Norwegian offshore workers started a walkout on Tuesday that would lower the amount of oil and gas produced, the union in charge of the industrial action told Reuters.

ANZ Research analysts said in a note that Libya risks more supply interruptions as a result of rising political upheaval, making it even less likely that OPEC would reach its recently enhanced output limit.

August Comex gold futures are now trading at $110.36, up $1.93 or +1.78 percent, at 05:29 GMT. The United States Oil Fund ETF (USO) closed at $81.70 on Friday, an increase of $1.35 or 1.68 percent.

Another encouraging development is that OPEC is struggling to fulfill the agreed-upon oil production goals. According to a Reuters poll, OPEC's ten members produced 100,000 less barrels per day (bpd) in June than they had promised to boost production by approximately 275,000 bpd.

The near future

The early Tuesday direction of the August WTI crude oil market will probably be determined by trader response to the short-term 50% level at $111.21.

Positive Scenario

A consistent increase over $111.21 will signal the presence of buyers. Looking for a surge through the short-term Fibonacci level at $113.49, then the major top at $114.05. If this move provides enough upward momentum.

The uptrend will be confirmed if $114.05 is taken out, with a minor top at $116.58 being the next probable destination.

Grizzly Situation

When prices move consistently below $111.21, sellers are present. Due to a string of minor retracement levels around $109.06, $107.79, and $106.31, this might result in a laborious break. The latter is the last possible support before the bottom at $104.56.