- WTI holds on to recovery gains as US-China trade optimism, US-Iran tussle please energy buyers.
- Official EIA data, more details on trade/politics in the spotlight.
Although API’s weekly inventory data failed to entertain oil bulls, renewed trade optimism, escalated tension amid US and Iran, helps WTI to remain firm around $56.30 during early Thursday.
The quote initially benefited from news headlines concerning the US-Iran tussle. The US announced another sanction against Iran and is also likely not to support the French proposal of availing multi-billion credit line for the Arab nation as a part of its “maximum pressure” policy.
The black gold’s upside got additional fuel after Reuters shared details of the phone call between China’s Vice Premier Liu He, the US Trade Representative Robert Lighthizer and the Treasury Secretary Steve Mnuchin. Trade representatives of the world’s two largest economies agreed to restart trade negotiations in October with mid-September consultations to create good conditions prior to the actual meet in Washington.
Crude buyers shrugged off the American Petroleum Institute’s (API) weekly US Crude Oil Stock report that mentioned an increase of 0.401 million barrels to the inventories versus the previous decline of -11.100 million barrels of contraction.
While trade/political headlines will keep offering busy trading schedule, the official weekly Crude Oil Stocks Change report from the Energy Information Administration (EIA) for the week ended on August 30 will be watched closely for confirmation of the API data.
Technical Analysis
100-day exponential moving average (EMA) level of $56.80 acts as an immediate resistance before highlighting downward sloping trend-lines since May 20 and April 23 around $57.40 and $58.20 respectively. On the flip side, July 18 low near $54.90 and Tuesday’s bottom surrounding $52.80 seem nearby supports whereas $51.80, $50.70 and $50.00 could lure sellers afterward.
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