- Oil manages to hold the 60 handle amid revived hopes of trade deal.
- Increase in US rigs count weighs on oil amid thin trading conditions.
- Markets await US Durable Goods data for some pre-Xmas action.
Fresh bids emerged once again just ahead of the 60.00 level, allowing a brief bounce in WTI (oil futures on NYMEX) over the last hours, as markets remain hopeful of a US-China phase one trade deal that keeps the appetite for risk assets underpinned.
US President Trump said over the weekend that the phase one trade deal will be signed “very shortly”. Trump’s comments further helped ease the ongoing trade tensions, which is likely to contribute further to an improved global economic as well oil demand growth outlook.
Moreover, a steady decline in the US dollar vs. its main competitors from two-week highs also collaborates with the renewed uptick in the black gold. The greenback corrects Friday’s upbeat US GDP data-led rally, with the USD index now -0.06% near 97.60 region. A weaker buck makes the USD-denominated oil more attractive to foreign buyers.
However, the recent report by the US Baker and Hughes oilfield services company, suggesting an increase in the drilling activity, will continue to cap the upside attempts in the barrel of WTI. The latest data showed that data the US energy companies added the most oil rigs this week since February 2018.
The focus now remains on the US Durable Goods Orders data for fresh dollar trades and its eventual impact on the USD-sensitive oil. Meanwhile, choppy price action cannot be ruled out later today, in light of pre-Xmas holiday thin market conditions.
WTI Technical levels to consider
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