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  • WTI is currently trading at $58.81bbls, from a low of $58.28bbls and slightly down from $59.07bbls high.
  • Prices of oil have been on the up on a weekly decline in domestic supplies, although traders monitor U.S.-China trade discussions.

WTI has been recovering from the recent lows below the 55 handle scored earlier this month and has been knocking on the door of a critical technical level around recent highs en route to test territory in the mid 58 handle and highest levels since mid-November.  

Yesterday’s stellar headline prints showing that both crude and gasoline inventories fell sharply have opened prospects for a continuation of the bull trend having shaken out offers at the double top highs around 57.80 – a nearly 4 million-barrel decline in last week’s U.S. crude supplies along with evidence that U.S. oil production may be faltering is likely to keep the trend underpinned.  

“Considering that the supply-side continues to lend a constructive narrative, we think the market will look past the disappointing data on the demand side. We still think the recent rally in crude has a more room to run, and are still comfortable with our $60/bbl WTI and $70/bbl Brent targets for 19Q2,” analysts at TD Securities explained.  

However, there have been reports, initially from Bloomberg News, that a meeting between Trump and Chinese President Xi Jinping will be delayed until at least April. Oil tends to correlate with risk appetite and such headlines do not bode well for riskier assets. Moreover, concerns over Chinas economic performance is an additional factor that will remain a thorn in the side for bulls.  

WTI levels

The price is now testing the territory through 58.50 having broken the double-top highs. Bulls look set on higher levels while holding above the $57.93bls and the horizontal prior resistance line going back to mid-Nov 2018. A break of 59.70 and then the 61.8% Fibo of the Oct 2018 sell-off to late Dec lows at 63.74 will reveal prospects for the 70 handle.