- WTI dropped to the support line within the rising wedge where bulls are committing opening back prospects for the $60 handle.
- WTI is currently trading at $56.95, down from a high of $57.69, holding above the lows of $56.72.
WTI slipped from fresh highs on Thursday with the government report revealing that domestic supplies had climbed for a fifth straight week, negating some renewed signs of overall declines in global production vs the optimism that China and the U.S. are on the verge of a trade deal, supporting risk, oil and stocks. This sentiment, as well as the evidence of shrinking global supply because of OPEC-led production cuts, have driven prices of oil to their highest settlements since November.
However, the latest EIA report has shown that domestic crude supplies rose a fifth straight week, up 3.7 million barrels for the week ended Feb. 15, above the 3.5 million-barrel rise expected.
Eyes on trade
On trade, analysts at ANZ Bank explained that China is reported to have offered to buy an extra USD30bn per year in agricultural products as part of trade negotiations:
“China’s proposal is part of ongoing offers to buy more agricultural and energy products to help reduce the US trade deficit and reach a deal. However, the US-China trade war is about much more than the trade deficit. Issues like intellectual property rights will also be discussed as part of negotiations, but these appear more difficult to tackle.”
WTI holds above the 38.2% retracement of the October to December sell-off at 55.55 and the100-day MA at 56.69. The price is also now above the Ichimoku cloud with the price well below the trending lagging span that indicates that the bull trend is well entrenched. The mood is bullish and eyes are on 60.00. On the flip side, a break back below the 38.2% fibo would target 55.80 (S1) and the day’s lows.