- A surprise drop in EIA inventory and threat to global oil supplies from US-Iran rift couldn’t withstand global trade worries.
- Developments at the US-China trade negotiations at Washington will be the key.
Having failed to hold the previous recovery, WTI now slips to $61.50 as doubts over the US-China trade deal grew stronger off-late during early Thursday.
The energy benchmark benefited from the on-going rift between the US and Iran after the US chose to send its armies to Iran suspecting retaliation by the nation in response to its sanctions. The fight turned tough with the latest sanctions from the US to curb Iran’s metal trading.
Elsewhere, a weekly release of the US stock report from the Energy Information Administration (EIA) marked a surprise drop of -3.963 million barrels versus the forecast of +1.215 million barrels and +9.934 million barrels’ prior.
Though, energy buyers couldn’t be lured as the latest statement from the US President Donald Trump offered additional hardships to the already thin chances of a successful deal with China.
Investors may now turn to actual results from the meet between the US and Chinese policymakers in Washington in order to determine near-term commodity moves.
Also in the immediate focus will be China’s headline consumer price index (CPI) and producer price index (PPI) numbers for April. CPI YoY could rise to 2.5% from 2.3% and may register +0.1% mark against -0.4% on a monthly basis whereas PPI could improve to +0.6% from +0.4% on the yearly format.
Technical Analysis
A 200-day simple moving average (SMA) near $60.60 offers strong downside support to the pair if it manages to break $61.00. Further, $60.00 round-figure and March 28 lows near $58.20 could flash on bears’ radar during additional south-run.
On the upside, $62.50 and $64.00 can entertain short-term buyers while $64.80 and $65.70 can hold the gates for a further rise towards $66.60.
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