WTI stays below 100-DMA despite latest trade/political headlines

• WTI cheers US-China trade optimism, inventory draw, declining US rig counts.
• Investors seem to get used to worrisome headlines from the Middle East.
• Trade/political news will be in the spotlight amid a lack of major data.

Despite taking the bids around $56.90 during initial Monday morning in Asia, WTI remains below the 100-day simple moving average (DMA).

The energy benchmark has recently been recovering amid trade positive headlines from the US and China while depleting US inventory levels adds strength to the momentum. Further, Baker Hughes US Oil Rig Count dropped for the third consecutive week, to 738 from 742, on Friday.

At the political front, Iran warns of fresh violence in Afghanistan while the Taliban threatened the US to lose more lives if it calls off peace talks. Also, Iran is going further away from the Nuclear Deal saying that the EU has failed to fulfill its commitments. Furthermore, Federal Aviation Administration (FAA) issued temporary flight restrictions for the US aircrafts and pilots entering Bahamian airspace in hurricane Dorian affected areas.

Even so, the crude prices refrain from a rally as recently released China’s trade balance showed the harsh negative impact of the US-China trade tussle that is still looming despite latest calls of the October meeting. Also adding to the downside pressure could be market’s fear for global recession.

With no energy-related data on the card, the black gold traders will keep following trade/political headlines for fresh impulse.

Technical Analysis

Unless breaking 100-DMA level of $57.41 on a daily closing basis, chances of WTI’s pullback to 50-DMA level of $56.15 can’t be ruled out.