- WTI recovers ground after Thursday sharp sell-off.
- Prices move beyond the $55.00 mark.
- Likelihood of a US-China trade deal still a long shot.
After bottoming out in new 2-month lows in the $53.50 region on Thursday, prices of the WTI are now managing to regain some composure and retake the $55.00 mark and beyond.
WTI weaker on trade jitters
The West Texas Intermediate had its worst day in the last four years on Thursday, plummeting more than $4 after President Trump announced further 10% tariffs on US imports of Chinese products worth $300 billion.
Trump’s move re-ignited fears on global growth and clouded prospects over oil demand, triggering a sharp correction lower in crude oil and riskier assets at the same time. Today’s recovery in crude oil prices looks somewhat limited, as speculations of some sort of Chinese retaliation have been gathering traction.
The barrel of WTI has therefore given away gains seen during the first half of the week, supported by persistent drop in US crude oil supplies. In this regard the API reported a drop of more than 6M barrel on Tuesday followed by a nearly 8.5M barrel drop in supplies reported by the EIA on Wednesday.
WTI significant levels
At the moment the barrel of WTI is gaining 1.93% at $55.46 and a surpass of $56.65 (200-day SMA) would aim for $58.73 (high Jul.31) and then $59.11 (100-day SMA). On the downside, immediate contention emerges at $53.53 (monthly low Aug.1) seconded by $51.46 (61.8% Fibo of the December-April rally ) and finally $50.54 (monthly low Jun.5).
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