WTI extends rally despite rising US crude oil stocks, trades above $53.50

• China is reportedly open to a partial trade with the United States (US).
• Tension in the Middle East rises after Turkey launched a military operation into Syria.
• Crude oil stocks in the US rose more than expected in the week ending October 4th.

Crude oil prices gained traction on Wednesday amid easing worries over the potential negative impact of a protracted US-China trade dispute on the energy demand outlook.  

Oil capitalizes on trade war headlines

Earlier in the day, citing an official with direct knowledge of talks, Bloomberg reported that China was open to making a partial trade deal with the US as long as  President Trump does not impose any new tariffs on Chinese goods.

Meanwhile, heightened tensions in the Middle East after Turkish President Erdogan announced that they have launched a military operation into northeast Syria provided additional support to crude oil prices. After dropping below the $52 mark on Tuesday, the barrel of West Texas Intermediate posted decisive gains on Wednesday and was last seen trading at $53.65, adding 2.1% on the day.

On the other hand, the weekly data published by the US Energy Information Administration (EIA) on Wednesday revealed that crude oil stocks in the US increased by 2.9 million barrels in the week ending October 4th to surpass analysts’ estimate for a build of 1.4 million barrels. Nevertheless, regardless of an initial negative reaction, crude oil prices largely ignored this data.  

Technical levels to watch for