- Oil undermined by US-China trade war and global growth concerns
- Downside appears capped amid supply threats and OPEC cuts.
- Focus shifts to US weekly crude stockpiles data for fresh direction.
Following the Asian steady decline from the 59 handle, WTI (futures on Comex) is seen consolidating in a tight range below the 58.50 barrier, with the bias leaning towards the downside amid looming concerns over the US-China trade dispute.
On the US-China trade update, the US President Trump recently said that “we are not ready to make a deal with China”, refueling concerns over the ongoing trade dispute. Moreover, uncertainty over the UK political situation and Brexit also continues to weigh on the investors’ mood and in turn reduce the appetite towards the higher-yielding assets such as oil.
However, the losses appear capped as the black gold continues to draw support from the looming supply risks, in the wake of the US sanctions on Iran’s exports and escalating Middle East geopolitical tensions. Meanwhile, the ongoing OPEC oil output cuts also help keep the downside in check.
Markets now stay focused on the US weekly crude inventory reports due later in the week ahead for the next direction on the prices. In the meantime, the risk sentiment amid trade-related developments will continue to remain the key market driver amid thin trading.
WTI Technical Levels