Oil pinned to the floor after storm fears subside

• Supply concerns in oil markets are seeing little bullish push as traders await some firm evidence of moves.
• Last week's run-up on temporary rig closures for tropical storm Gordon has subsided.

Crude prices took a step down on Tuesday with WTI dipping back below the $70/barrel figure as price pressures eased, though headlines around Saudi Arabia and their desired target for oil prices has thrown the mix for a bit of a loop in Wednesday's early session.

A slew of US oil rigs and drilling platforms were forced to go dark in anticipation of tropical storm Gordon from the Gulf of Mexico, but the storm shifted course, eliminating the need to keep production facilities offline.

Impending sanctions on Iran from the US would also normally be spurring prices higher, but crude traders are nervous about the potential knock-on risks within emerging markets as the US' scorched-earth trade policies begins to destabilize global growth. Stuttered growth within emerging markets represents a significant headwind to oil demand for major producers, and the threat of a contagion-style contraction is keeping bulls at bay for now.

In Saudi Arabia, Reuters cited unnamed sources that OPEC's #1 crude oil producer is actively seeking to keep oil prices between $70 and $80 per barrel, a move that runs hotly in contest with statement made both to and with US President Donald Trump regarding the direction of oil prices, and Saudi Arabia's willingness to expand oil production to help make up the contraction expected from Iranian market reduction on sanctions.

WTI levels to watch

With WTI back under $70, buyers will be looking for hints that Saudi Arabia is stepping back into the markets in someway, or contracting supplies before hitting the buy button, and despite fears of shaky emerging markets, demand remains elevated, and oil traders will be looking to keep prices above the floor at 69.50 until broader market factors push costs higher. WTI found a stiff new high yesterday near 71.50 in the run-up to oil counts, and the long-term bull trend remains intact.