- Oil lacks follow-through upside amid increase trade anxiety.
- Bearish US EIA Crude Stocks data also adds to the selling bias.
- All eyes on US-China trade talks and Mid-East geopolitics.
WTI (oil futures on NYMEX) witnessed volatile trading so far this European session on Thursday, the risk tones flip-flop in anticipation of the US-China trade outcome.
Trade and geopolitics to play a pivotal role
The black gold fell over the last hour after the trade-related optimism faded and markets turned cautious ahead of the key trade talks. The US Treasury yields are seen falling alongside the Wall Street futures, as markets are not ruling out the trade arrangement to fallout, given the past experience between both the US and China.
More so, the bigger-than-expected jump in the US crude stockpiles, as reported by the Energy Information Administration (EIA) also added to the downside in the prices. The US crude stocks rose by 2.9 million barrels in the week to Oct. 4, more than double expectations of a 1.4-million-barrel increase.
However, the losses remain capped by broad-based US dollar weakness and heightened tensions between Turkey and Iran-allied Syria. The geopolitical tensions threaten to disrupt oil supplies from the OPEC producers. Further, the political unrest in the OPEC’s two oil producers, Iraq and Ecuador, further aggravates the supply disruption risks, with Ecuador oil output likely to fall by one-third amid protests.
Markets remain focussed on the US-China trade talks and fresh Mid-East geopolitical updates for the next direction on the prices.
WTI Levels to watch
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