- Supply-cuts, oil inventories counter pessimism at the global trade system.
- Baker Hughes data will be next to watch.
WTI trades near $60.00 during early Friday. The energy benchmark failed to sustain its rise past-$60.00 and has been trading with the low around $59.30 as doubts over economic growth amid trade tensions grab investor attention. Looking forward, the US Baker Hughes oil rig count could offer fresh directions to the price moves.
Depleting inventory levels join supply cuts from the OPEC+ alliance in order to help the oil prices portray recent upward trajectory. Whereas the US sanctions over Venezuela and Iran act as an additional force to the upside. However, concerns for a trade deal between the US and China, coupled with weakness in manufacturing global PMIs, challenge the WTI strength.
The US policymakers have off-late been tough over China and the BBC report signal the US President Donald Trump pushing White House lawmakers to demand double or triple imports from China in order to have a successful trade deal.
China, on the other hand, has confirmed Beijing visit of the US leaders but is still unclear when China’s President Xi Jinping will confront Mr. Trump for the final deal. Furthermore, the dragon nation recently levied temporary anti-dumping duties on the certain goods of the EU, Japan, Indonesia and South Korea. The news report increased pessimism surrounding macro trade system that has already damaged the global economy and likely crude demand as well.
The weekly release of Baker Hughes oil rig count is a closely watched energy indicator as it conveys the active number of rigs from the US, indicating supply counts in-turn. During the week ended on March 15, the US oil rigs stood at 833.
WTI Technical Analysis
While $60.30 acts as immediate resistance, a successful break of $61.00 becomes necessary for WTI to aim for 61.8% Fibonacci retracement of the October – December 2018 sell-off around $ 63.60/70.
On the downside, $59.00, $58.20 and $57.90 can entertain short-term sellers before pleasing them with a 50-day simple moving average (SMA) around $55.30.
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