WTI oil prices dip below $34 as US-China tensions escalate

• WTI crude oil pulls back from two-month highs past $34 as US-China Tensions escalate.
• Oil prices’ rally loses footing as the USD strengthens on concerns about a trade war.
• The overall trend remains positive after an 80% appreciation in May.

Crude oil prices have trimmed gains on Thursday, pulling back from two-month highs at $34,75, to session lows at $33.25  after US president Trump stirred US-China tensions. Trump criticism towards China has boosted concerns about a trade war, dampening risk appetite.

Trump threats blames China for meddling in US elections

President Trump has blamed China for meddling in US elections with a “massive disinformation campaign” aimed to support the Democratic candidate, Joe Biden. China has reacted to Trump’s criticism warning about “countermeasures” to the US sanctions threat and pledging to firmly defend their interests.

The escalation of the tensions between the world’s two major economies has curbed market optimism triggered by the plans to ease COVID-19 restrictions, reviving fears of a trade war which have sent the USD higher weighing on commodities and stock indexes down.

WTI futures’ overall trend remains positive

WTI oil futures are now practically flat on the day yet in a clearly positive trend after having appreciated more than 80% so far this month to reach 10-week highs at $34.65. Above here, oil might find resistance at the 35.00 psychological level and above here, $36.30 (March 11 high) and the 100-day SMA around $37.60.