- WTI reports gains amid an improved risk appetite in stock markets.
- Reports of US-China trade talks seem to be boding well for risky assets.
West Texas Intermediate (WTI) crude is flashing green in Asia alongside gains in the equity markets.
At press time, a barrel of WTI is changing hands near $23.85, representing a 1.23% gain on the day. Meanwhile, the futures on the S&P 500 are up 1.13% and major Asian equity indices like Japan’s Nikkei, Australia’s S&P/ASX 200, and Hong Kong’s Hang Seng are reporting 1% to 2% gains.
The risk sentiment seems to have been buoyed by reports of US-China trade talks. China’s state news agency, Xinhua, said an hour ago that US and Chinese Trade representatives held a phone call and agreed to remain in communication and implement the phase one trade deal, which was worked out in December.
Following Xinhua’s report, the US Trade Representative (USTR) Office came out with an official statement, citing that the Chinese Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer participated in a conference call.
While WTI is benefiting from the improvement in the risk appetite, its price is still trading well below Thursday’s high of $26.74. The black gold was up more than 10% during Thursday’s European trading hours on optimism generated by Saudi’s decision to raise the June price for its Arab Light crude oil to Asia by $1.40 a barrel from May.
The uptick, however, was reversed and prices ended the day at $23.55 as the dismal US weekly jobless claims data renewed fears of a prolonged economic downturn in the US and global economy.
WTI has rallied by more than 25% this month. While analysts at Goldman Sachs and Morgan Stanley believe the worst is behind us, they see low odds of a V-shaped recovery in prices to levels seen at the start of the year.
Technical levels
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