- Oil extends weakness into early Asian trading, stays below 57.00.
- US-China trade uncertainty offset Cushing inventories drawdown.
- Trades headlines and US weekly crude supplies report to offer next direction.
WTI (oil futures on NYMEX) opened Tuesday’s Asian trading on the back foot, extending Monday’s bearish momentum below the 57 handle, as the sentiment remains undermined by a lack of clarity on the likely US-China trade deal.
The absence of any progress on the US-China trade front is re-igniting concerns over the global economic slowdown and its eventual impact on the oil demand growth outlook. This comes after the US President Trump said over the weekend that there had been incorrect reporting about US willingness to lift tariffs as part of a “phase one” agreement.
The black gold remains under pressure despite the broad-based weakness in the US dollar, in the wake of tumbling US equities and Treasury yields overnight. A weaker greenback makes the USD-denominated oil cheaper for the holders in foreign currencies.
Meanwhile, the bulls yearn for some support from a drop in crude inventories at Cushing, the delivery point for WTI. The latest data released by the market intelligence firm Genscape showed that crude stockpiles about 1.2 million barrels in the week to Nov. 8, snapping five straight weeks of increase.
Looking ahead, the barrel of WTI will continue to track the US-China trade-related headlines that continue to direct the near-term price direction. Also, in focus remains the US weekly Crude Stocks data due on the cards later this week.
WTI Levels to watch
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