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  • WTI sellers catch a breath as positive signals for the US-China trade relation question the latest downpour.
  • Expected change in the UK-Iran geopolitical concerns and fears of global recession limit recovery.

While trade positive news stops WTI declines for now, the expected recovery in the UK-Iran relations and doubts over the strength of global economy keep prices in check while portraying $55.00 during early Thursday morning in Asia.

The energy buyers earlier cheered the South China Morning Post (SCMP) news that Beijing sees a positive signal in the US President Donald Trump’s latest delay of tariffs on some of the Chinese goods. Adding to the optimism was the President Donald Trump’s tweets that took a U-turn from previous warning that China should stay away from Hong Kong crisis.

On the contrary, inversion of the US 10-year and two-year Treasury yields renewed the fear of 2008 financial crisis and tamed Oil demand. Also exerting the downside pressure is the UK’s expected decision to release Iranian oil tanker on Thursday, which in turn can improve relations between the nations that have recently been at loggerheads.

Further on the bearish side is the latest Crude Oil Stocks Change report from the Energy Information Administration (EIA). The report suggests an increase of 1.580 million barrels of inventory versus expected declines of -2.761 million barrels.

Investors will now keep an eye over the trade/political headlines, together with the US Dollar (USD) strength as it generally has an inverse relation to commodities, for fresh direction.

Technical Analysis

While 10-day simple moving average (DMA) at $54.44 acts as immediate support, $53.20 and current month low near $50.50 may question further declines. On the upside, 100-day exponential moving average (EMA) level of $57.35 seems to limit the black gold’s near-term rise, a break of which can propel the quote to July-end to top of $58.85.