- WTI remains modestly flat as a decline in crude inventory confronts mixed news/headlines concerning North Korea and Saudi Arabia.
- 50-day and 200-day simple moving average (SMA) limit immediate upside with $54.80/70 being the strong support to the south.
Despite witnessing trade positive news, coupled with lesser than forecast oil inventory numbers from the US, WTI remains little changed as political news play their role. The energy benchmark takes the rounds to $56.00 during early Thursday.
Be it the official EIA figures of the API numbers, both signal that the US crude stockpiles have been declining off-late. The -10.835 million barrels of contraction (versus -4.011 million barrels market consensus) in the US Crude Oil Stocks Change from the Energy Information Administration (EIA) follows the slump in the American Petroleum Institute (API) inventory numbers concerning the US.
The US and China are refraining from any negative headlines that can possibly disturb next week’s trade meeting in Beijing.
While the news that North Korea recently test-fired two short range missiles can play positive for the oil prices, the US President Donald Trump’s use of his Veto to turn down measures blocking arms sales to Saudi Arabia challenge the sentiment.
Traders may now await the US response to the North Korean missile test and Saudi Arabia’s reaction to the President Trump’s support for fresh impulse.
Technical Analysis
The $57.00 becomes the key upside resistance for the black gold as it including 50 and 200-day SMA levels, a break of which can further propel prices towards $60.00 and then to a downward sloping trend-line since late-May, at $60.30. Alternatively, $54.80/70 horizontal support-zone comprising current month low and early June high seems a tough nut to crack for sellers.
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