WTI: Bears in control despite trade-deal optimism, testing key support level

• WTI fails to garner strength on trade deal optimism.
• Bears testing a key  confluence support level on a  38.2% Fibo target.  

West Texas Intermediate crude prices are relatively  flat for the day at the time of writing but have travelled from a low of $57.18 to a high of $58.05. They currently stand just below the highs of the day at $57.82.  

US equities set fresh record highs amid trade optimism yet the price of a barrel of oil didn’t see any follow through as investors  regarded that there is too much  uncertainty which continued to keep bulls in check.  

However, there were reports that  China is planning to lift penalties on intellectual property violations which have bolstered trade optimism, but we need to see some concrete plans inked between the two nations before bulls can shift into a higher gear.  

Related markets firm on trade deal optimism

However, in related markets, and at the time of writing, the S&P 500 was up 0.6% and the DJIA up 0.5%. In Europe, the DAX was up 0.6% and the FTSE 100 was 0.9% higher despite a bid on the pound.  Gold was lower by 0.4% to $1,455.70/oz. The question now is whether Oil can play catch up?

“With the algorithmic buying program in the rearview, we would not be surprised to see crude oil prices ease off recent highs in the coming week. Indeed, large surpluses in early 2020 still linger on the horizon, especially as OPEC+ will likely hesitate to deepen output cuts when they meet in December, which suggests this latest rally will likely run out of steam,”  

– analysts at  TD Securities argued.  

WTI levels

WTI moved to multiweek highs on Thursday but has since moved back to test the 50 4-hour moving average which is located below the 20th Nov trend line support with the 22nd Nov sell-off. This level is also where the 38.2% Fibonacci of the said 20th Nov to  multiweek highs range.