WTI traders take intermediate clues from US-China tension ahead of OPEC+ meeting
|- WTI nears $58.00 while concentrating on the US-China trade/political tension.
- Geopolitical problems in Iran seem to have less impact.
- Saudi Arabia’s likely resistance to production cuts make next week’s OPEC+ the key.
WTI drops to the intra-day low of $58.07 by the press time of early Friday in Asia. The energy benchmark seems to have negatively affected by the sluggish demand outlook due to the US-China tussle. Though, traders are more concerned for the next week’s meeting of major oil producers in Vienna.
Geopolitical tension concerning Iran can be considered as a counterforce to the latest tension between the United States (US) and China. Iran’s protests, even after turning softer, still give troubles to the policymakers and they blame the US for that, as per the UK Express.
On the contrary, China is likely to blacklist the writers of the Hong Kong Act, as per Global Times, in retaliation to the US President’s latest move. However, headlines are yet to turn negative for the phase-one deal among the world’s top two economies.
Moving on, Saudi Arabia’s Prince Abdulaziz bin Salman will host his first meeting of Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia, popularly known as OPEC+, during December 05/06 in Vienna. The oil leader has recently started arguing against the global production cuts while claiming to be the lone bearer of that burden. As a result, investors will keep a close eye on next week’s OPEC+ meeting for near-term oil moves.
Read: OPEC, OPEC and more OPEC will be what oil markets will be all about next week
There has been some chatter by the Goldman Sachs’ analysts about recovery in global and the US economies in 2020 while JP Morgan favored global growth rebound. However, none of this could please oil traders much ahead of the next week’s key event.
Technical Analysis
Monthly high surrounding $58.80 holds the key to late-September tops near $59.40 and then a consequent rise to $60.00. On the downside, $57.30 and $54.90 can offer the following supports if prices slip beneath $58.00.
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