How is oil doing at the start of European trading?
Oil prices are still underpinned but off their early highs today
Notably, WTI is just sitting under the $60 level currently as prices continue to hold firm gains relative to last week's close. Fears of any major supply disruption has receded somewhat as Saudi Arabia reaffirms that there will not be a shortage in supplies - since they can overcome that with the stockpiles they have.
But there's no doubt that such a hit to the kingdom's production capability is significant as it does mean that it removes a significant portion of the supply glut in the oil market.
Looking at the chart, the key daily resistance to watch out for will be the 23.6 retracement level and July highs at around $60.88-94. A break there will allow buyers to feel more confident from a technical perspective to chase a move towards $65.00 levels.
The risk for buyers now is if price starts to slip back towards the 100-day MA (red line) @ $57.25. That will undermine the bullish bias established from the event above.
Fundamentally, there are two sides of the story. In the short-term, heightened geopolitical tensions will keep oil prices underpinned. However, in the long-term (outlook into 2020), this can be seen as a hiccup - although, a rather large one - as non-OPEC production continues to grow amid weakening demand due to the global economic slowdown.