- WTI extends previous declines as trade war fears join the previously released EIA inventory report.
- The US passes the Hong Kong bill and renews political tension with China, which in trade could dim prospects of phase-one deal.
- Absence of the US traders could restrict the market’s reaction.
With the uncertainty over the US-China trade deal joining the earlier published EIA stockpiles, WTI remains below $58.00 during early Thursday.
The black gold has recently come under pressure after the United States (US) President Donald Trump passed a bill that would require the US State Department to annually review Hong Kong’s special trade status. The same enables the Trump administration to levy sanctions against persons/institutions indulged in human rights violations.
In a reaction to the bill, the Hong Kong government said the bill was “unnecessary and unwarranted” and would harm relations between the US and Hong Kong, as per the New York Times. Also, China’s Foreign Ministry crossed wires, via Reuters, while saying, “The act seriously interferes in the internal affairs of China violating international laws and basic principles of foreign relations.”
Late on Wednesday, the energy benchmark reversed from Friday’s top after weekly release of the US Crude Oil Stocks Change from the Energy Administration Institute registered an unexpected increase. The official inventory data suggested the oil stockpiles grew 1.572 million barrels versus the forecast favoring depletion of 0.418 million barrels during the week that ended on November 22.
The BBC’s news suggesting a group of protesters in Iraq have set fire to Iran’s consulate in the southern city of Najaf and global oil producers’ support for sustained production cuts seem to have been ignored off-late.
While Thanksgiving Day Holiday at the US could restrict the market’s reaction to the news, Chinese headlines concerning the bill and any signals as to how this could affect their trade relations with the US will be closely watched.
Technical Analysis
200-day Simple Moving Average (SMA) near $57.60 will be the sellers’ immediate target until prices stay below the monthly top near $58.80. If the quote rises past-$58.80, it can challenge September 19 high near $59.45/50.
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