WTI plummets to fresh daily lows below mid-$51s as production in Kirkuk restarts

Crude oil prices failed to extend their daily gains, pushing the barrel of West Texas Intermediate below the $52 handle. As of writing, the barrel of WTI was trading at $51.30, losing 1% on the day.

Earlier in the day, the escalating geopolitical tensions between Iran and the United States fueled the rise in oil prices as the possibility of the U.S. forcing new sanctions on Iran risked a decrease of nearly 1 million barrels in global oil supply. Moreover, the ongoing military operation in Kirkuk, which produces nearly 500K barrels per day, continued to raise concerns over an output disruption.

“Oil and geopolitics are very much interlinked,” Fatih Birol, executive director of the International Energy Agency, told Reuters and further added, “oil security remains a critical issue.”

However, recent reports of Iraqi forces taking full control of Kirkuk triggered a sell-off as the production is expected to return to normal levels fairly soon. The barrel of Brent oil is now losing 0.8% at $57.35.

• Iraqi OilMin: All oil facilities in Kirkuk province now under government control - Sky

Technical outlook

The barrel of WTI could encounter the first technical resistance at $52 (psychological level) before $52.85 (Sep. 29 high) and $53.76 (Apr. 12 high). On the downside, supports align at $50.70 (Oct. 13 low), $50 (psychological level) and $49.15 (Oct. 9 low).