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  • WTI trades little changes near $56.70 on early Friday.
  • Optimism surrounding the US-China trade deal and EIA report favored the energy benchmark but doubts over global economic strength challenged buyers.
  • Monthly employment report from the US will act as an immediate catalyst with 100-day SMA at $55.10 acting as nearby strong support.

WTI stabilizes around $56.70 during early Asian hours on Friday. The energy benchmark recovered yesterday as Trump’s push for a trade deal with China followed EIA’s stockpile report showing declines in gasoline, distillate and propane inventories. Though, gains couldn’t last long as doubts over global growth and strong US Dollar (USD) disappointed the buyers. Traders may now concentrate on today’s US employment report to determine the near-term market direction.

Latest reports from the US-China trade front signals the US President Donald Trump is pushing the White House officials to clear a deal soon. The news becomes positive for the world’s largest industrial player, China, and in-turn for energy traders.

It should also be noted that Wednesday’s weekly inventory report from the Energy Information Administration (EIA) also had a hidden gift for bulls. While crude inventories rose more than forecast 1.203M to 7.069M, stockpiles concerning distillate, gasoline and propane all dropped. Moreover, on-going OPEC+ supply cuts also helped WTI to remain strong.

However, sellers sneaked in during Thursday evening after the European Central Bank (ECB) cut its growth forecast down and raised doubts over the global economic strength. Also, ECB’s new TLTRO and dovish surprise strengthened the USD that has a negative correlation with crude prices.

Looking forward, monthly reading of the US employment indicators, at 13:30 GMT, will be closely watched market catalyst. The headline Nonfarm Payrolls (NFP) is likely to have softened in February to 180K from 304K whereas average hourly earnings may strengthen to 3.3% YoY versus 3.2% earlier readout. Also, the unemployment rate bears the consensus of a decline to 3.9% from 4.0%. While a positive outcome could strengthen the USD and might hurt the WTI on an immediate basis, increased optimism surrounding the employment market may help the energy traders to ignore macroeconomic pessimism.

WTI Technical Analysis

100-day simple moving average (SMA) at $55.10 is likely restricting immediate downside, a break of which may recall $53.50 on the chart.

On the upside, $58.10 and $58.80 can offer nearby resistances ahead of highlighting 200-day SMA figure around $62.70.