- Risk-off grips Europe amid escalating trade war fears, WTI attempts a bounce.
- Goldman Sachs predicts lower oil prices in the month ahead due to trade wars.
- Focus on US ISM PMI, weekly US crude supplies for fresh direction.
Following a phase of downside consolidation just ahead of the 53 handle, WTI (futures on Comex) catches fresh bids and breaks to the upside in a bid to regain the 54 handle, despite prevalent risk-off market profile fuelled by intensifying trade wars and global recession fears.
A renewed risk-aversion wave swept the markets in Europe after the Chinese Education Ministry warned over the risks of studying overseas after the US visa limits. Moreover, the latest US tariff threats on Mexico also kept investors unnerved, with a flight to safety the main theme so far this Monday.
Despite the latest upside attempt, the black gold remains exposed to downside risks, as it enters the bear markets territory, with 20% loss seen since April highs. The risks of a global recession remain very high, as reflected by the downward revision made to the US growth forecasts by Goldman Sachs, that raises oil demand outlook concerns and weigh on the prices.
Further, Goldman Sachs said in its latest client note that it sees oil prices lower in Q3 2019 due to escalating US-China trade war and weaker activity indicators. The bleak oil outlook could also weigh down on the barrel of WTI.
Looking ahead, the commodity will take cues from the US ISM manufacturing data due later today and the US weekly crude stocks data slated for release later this week while trade concerns-driven risk trends will continue to play a pivotal role.
WTI Technical Levels
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