- WTI trades near $56.70 on early Tuesday.
- The energy benchmark recently gained as the US and China came closer to end their trade spat and production leaders signaled output reduction.
- Recent doubts over the US-China trade deal and China’s lowering of GDP forecast pulled crude a bit backward.
WTI trades little changed near $56.70 during the early Asian session on Tuesday. The energy benchmark increased Monday on positive sentiments favoring an end to the US-China trade spat and supply-cut concerns from OPEC+ alliance. However, prices struggled to carry the gains overnight after investors started doubting the peace accord between the world’s two largest economies while developments from China’s annual parliamentary event were also grim.
Over the weekend, headline news sources like Reuters and Wall Street Journal affirmed that the US and China are close to ending their tariff-war that’s roiled global markets. The report boosted commodities as China is the world’s largest commodity user and its spat with the US has weighed high on its domestic fundamentals.
Buyers got an additional boost after Reuters reported Russia’s commitment to increase supply cuts and also on Bloomberg’s report conveying OPEC exports and Nigerian pipeline closure. As per the Bloomberg news, the tanker-tracking consultant Kpler reported that the February month crude exports from OPEC dropped nearly 7,00,00 barrels per day.
In spite of witnessing positive start to the week, Crude failed to hold on the strength as traders remain cautious for the US-China trade deal. Also, news that China lowered its GDP forecast to 6.0-6.5% for 2019 during the annual parliamentary event added weakness into the WTI.
Looking forward, energy traders will be closely observing developments surrounding US-China trade while the weekly release of API crude oil stock may also gain market attention. The industry-backed inventory report released by American Petroleum Institute registered a drawdown of -4.2 million barrel during last week.
WTI Technical Analysis
Short-term symmetrical triangle confines WTI moves between $57.10 and $56.00. Should the quote rallies beyond $57.10, it can aim for $58.00 with $57.50 likely being intermediate halt.
During the downside, $55.30 and $55.00 may please sellers past-$56.00 break.
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