- Fresh US-China trade woes outweigh upbeat Saudi OilMin comments-led optimism.
- Focus on risk trends, trade updates and US crude stocks data.
WTI (futures on Comex) is seen reversing earlier gains and looks to fill in the bullish opening gap, as it hovers just ahead of the 63 handle amid a renewed risk-off wave that gripped the European markets following the latest US-China trade development.
The risk appetite for the higher-yielding assets (such as oil) soured after reports hit the wires that China is considering suspending business with suppliers who agreed to halt supplying Huawei. The headlines sparked fresh concerns over the US-China trade dispute.
The black gold witnessed a bullish opening gap of about 50 cents and went to hit the highest levels in two weeks at 63.96 after the Asian traders cheered the weekend’s upbeat comments by the Saudi Arabian Energy Minister Al-Falih.
Al-Falih noted there was the consensus among the OPEC and allied (OPEC +) oil producers to drive down crude inventories “gently” but he would remain responsive to the needs of a “fragile market.”
Further, the indications by the OPEC that it will likely maintain production cuts that have helped support prices this year also added to the upside in the oil prices.
Meanwhile, the barrel of WTI continued to draw support from the escalating tensions between the US and Iran, especially in light of last week’s attacks on Saudi oil assets and the firing of a rocket on into Baghdad’s heavily fortified “Green Zone” that exploded near the US embassy.
In the day ahead, the soured risk sentiment will continue to keep the downside risks exposed in the commodity, as markets await the US weekly supplies report due later this week for the next direction on the prices.
WTI Technical Levels