- Oil supported by hopes of further OPEC+ output cuts.
- Mixed market mood amid fresh trade woes weighs.
- All eyes on US-China trade updates, US API Crude Stocks data.
WTI (oil futures on NYMEX) picks up fresh bids over the last hour, extending its steady recovery mode from just under the 56 handle, despite the mixed sentiment seen in Tuesday’s European session so far.
The black gold is heading back to test Monday’s high of 56.65, as the bulls continue to derive support from increased expectations that the OPEC and its allies (OPEC+) will extend the output cut policy well into the next year when they meet this Friday in Vienna.
Further, the same belief is endorsed by the US banking giant Goldman Sachs, as it says that “we believe the global oil supply-demand balance requires an extension of the current OPEC+ cuts.” The hopes of further supply cuts help keep the downside cushioned in the barrel of WTI.
Meanwhile, the latest uptick in oil prices can be attributed to fresh selling seen in the US dollar across its main competitors, as the European traders hit their desks and react negatively to the downbeat US data and US President Trump’s USD jawboning.
Trump said: “The Fed should lower rates (there is almost no inflation) and loosen, making us competitive with other nations, and manufacturing will SOAR! Dollar is very strong relative to others.”
However, the buyers remain wary over the further upside, as markets trade with caution amid a revival of global trade concerns after Trump announced fresh tariffs on Argentina and Brazil while the US tariffs threat to the European Union (EU) also continue to dampen the investors’ sentiment.
Attention now turns towards the weekly US Crude Stocks data, due to published later on Tuesday at 2130 GMT by the American Petroleum Institute (API), for some near-term trading opportunities. The next direction in the commodity will be determined by the outcome of the OPEC+ meeting due later this week.
WTI Levels to watch