WTI stays firmer towards $70.00 on mixed news over Iran, North Korea

WTI keeps Friday’s upbeat performance to kick-start the key week.

IAEA-Iran agrees to solve the most urgent issue, North Korea testfires a long-range cruise missile.

US-China talks, vaccine optimism keep buyers hopeful but virus woes challenge the upside momentum.

A light calendar highlights risk catalysts as the main drivers.

WTI holds onto the previous recovery moves to target a fresh monthly high, up 0.60% intraday around $69.90 during Monday’s Asian session. In doing so, the oil benchmark struggles to justify news concerning Iran’s likely nuclear peace, as well as geopolitical tensions emanating from North Korea, as market sentiment improves.

The International Atomic Energy Agency (IAEA) Chief Rafael Grossi recently visited Tehran and returned with the good news of striking a deal with Iran to solve "the most urgent issue" between them, the overdue servicing of monitoring equipment to keep it running, per Reuters. This raises the hopes of fresh talks on a wider deal with the West, added the news.

It’s worth noting that the nuclear talks with Iran are on a halt since June and the IAEA agreement could allow Tehran to overcome the oil sanctions and flood the energy markets with more crude oil if it matches to make peace with the US.

On the other hand, North Korea’s KCNA came out with the news suggesting that the hermit kingdom testfired a long-range cruise missile during the weekend. The news should escalate the US-North Korea tension and may help energy prices on fears of supply disturbance.

Elsewhere, chatters over US stimulus and the easing of the Sino-American tussles join the vaccine optimism to favor the market sentiment during the week start. That said, the S&P 500 Futures rise 0.20% by the press time.

US Democrats are up for easing their previous demands to push forward President Joe Biden’s $3.5 trillion stimulus. Biden’s six-pronged strategy and the US-China talks after multiple months of silence favor market sentiment and commodity prices.

Moving on, US inflation figures and retails sales are the key data to watch during the week. Also important for oil traders is any progress on the US stimulus, nuclear talks and the Sino-American front.

Technical analysis

A clear upside break of 50-DMA, around $69.25 now, needs to cross the monthly high near $70.45 to extend the WTI recovery moves.