- Short covering in place due to the lack of major catalysts.
- Technical levels indicate pullback with Baker Hughes’ inventory data in the spotlight.
Having registered the biggest decline in six-months, WTI is on the bids around $58.30 during early Friday.
The black gold couldn’t sustain expectations of weak future demand from its largest customer, China, amid trade rift with the US.
Downbeat purchasing manager index (PMI) numbers from the EU and the US could also be considered as catalysts to the energy benchmark’s recent declines.
With the world’s top two economies continue arguing over trade and indicating punitive measures on each other, traders await fresh clues to determine the near-term direction and portrayed the U-turn from the 100-day simple moving average (SMA).
Weekly release of the Baker Hughes US oil rig count could gain immediate market attention as the numbers have been on south-run off-late. The recently released data for the week ended on May 17 showed a consecutive second drop in the count to 802.
In addition to the rig counts and political plays surrounding global trade, the US durable goods may also gain importance and robust economic data from the world’s largest economy could question the latest pessimism concerning macro growth.
Technical Analysis
FXStreet Analyst Ross J Burland spots oversold stochastics and 50% mean reversion of current week’s range to expect an uptick towards March month double-top.
Stochastics are oversold, so a move higher is likely. On a break of 60.02, 60.50 comes in as the 50% mean reversion of the 20th May weekly stick’s range and a double top target area ahead of 60.80. Higher up, the 17th May low of 62.51 and 26th April lows comes in at 62.26. Bears are now in control below the 60 handle with a touch-down at 57.36 the overnight low, to the 61.8% Fibo, (late Dec 2018 to April highs).
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