- Prices of the WTI are sharply lower near $61.00/bbl.
- US-China trade jitters keep weighing on crude oil.
- API will report later on US crude oil supplies.
Crude oil prices are trading well into the negative territory on Tuesday, taking the barrel of West Texas Intermediate to the area of daily lows near $61.30.
WTI lower on trade concerns
The risk-off mood has been picking up pace since Monday following rising concerns over the US-China trade friction despite both parties will meet later this week to resume talks in Washington.
It is worth recalling that fresh trade tensions resurfaced on Sunday in response to President Trump’s threats to increase tariffs and impose new ones on US imports of Chinese products.
Increasing trade concerns have so far eclipsed geopolitical effervescence around Iran, which threatened reciprocal actions amidst persistent US pressure on the country’s oil exports.
Moving forward, the American Petroleum Institute (API) will report later in the NA session on the weekly variation of US crude oil inventories ahead of tomorrow’s official report by the DoE.
What to look for around WTI
Prices of the WTI have come under selling pressure after reaching fresh multi-month tops beyond the $66.00 mark per barrel in late April. However, the resurgence of the risk-off mood in response to trade concerns, increasing US crude oil production and supplies have all undermined the sentiment in the last sessions. On the flip side, prices appear to be looking for some contention on the back of US sanctions against Iranian crude oil exports, turmoil in Venezuela, speculative positioning, geopolitical effervescence in Libya and the so-called ‘Saudi put’ along with the ongoing OPEC+ deal to curb oil output.
WTI significant levels
At the moment the barrel of WTI is retreating 1.83% at $61.39 and faces the next support at $59.98 (low May 6) seconded by $59.63 (50% Fibo of the October-December drop) and then $56.09 (100-day SMA). On the upside, a break above $63.71 (21-day SMA) would aim for $64.64 (high Apr.9) and finally $66.46 (2019 high Apr.23).
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