- Oil regains 58 as markets await a trade breakthrough.
- Expectations of US crude stocks draw offer support to the oil bulls.
- Eyes on trade developments and risk trends for next direction.
WTI (oil futures on NYMEX) broke the Asian consolidative phase to the upside in the European trading this Tuesday but the further upside lacks certainty, as ongoing US-China trade developments continue to keep markets confused. Therefore, they refrain from placing any directional bets on higher-yielding assets such as oil.
‘Broad trade consensus reached; differences remain on tariffs’ – Global Times
Despite the earlier reports the US and China have reached a trade consensus on solving issues, the doubts over a potential trade deal remain after the Global Times cited the experts, as saying that differences still remain on the US tariffs rollback.
Amid looming trade uncertainty, the US dollar continues to hold a higher ground across its main competitors, with USD index hovering near-weekly tops of 98.38. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.
However, the bulls manage to derive support from expectations of a drawdown in the US weekly crude stockpiles. According to a Reuters poll of analysts, the US crude oil stockpiles are expected to have declined by 300,000 barrels last week which would be the first decline in five weeks.
Looking ahead, the broader market sentiment will continue to play a pivotal role behind the oil price-action, in the wake of the US-China trade issue while all eyes remain on the American Petroleum Institute’s (API) Crude Stocks data due at 2130 GMT for a fresh direction on the prices.
WTI Levels to watch
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