- WTI remains close to $59.00 at the start of Friday’s trading.
- Supply constraints please buyers whereas doubts over future demand, mainly due to the US-China trade pessimism, challenge the upside.
- $60.00 continues to lure optimists unless the break of $58.80 takes place.
WTI is trading close to $59.00 during initial Asian sessions on Friday. The energy benchmark stretched its US inventory backed upside on Thursday after reports challenging oil supply drew market attention. However, recent pessimism surrounding the US-China trade deal continued to cap the increase.
Weekly release of the EIA crude oil stocks followed previously released industry data by offering a surprise draw of -3.862M against 2.655M forecast and 7.069M prior. Energy traders welcomed the report with extended buying whereas comments from Iraq’s oil minister Jabar al-Luaibi that the country is seeking a higher price for crude oil, followed by Reuters report stating the US aims to cut Iran oil exports to under 1 million bpd from May, strengthened the sentiment on Thursday.
It should also be noted that the monthly oil market report from the Organization of the Petroleum Exporting Countries (OPEC) mentioned a fall of 221,000 bpd in February month output to 30.549 million barrels.
While headlines signaling supply constrain pleased buyers, challenges to the US-China trade deal checked the rally in prices. The reason being, China is the world’s largest crude importer.
Following the US lawmakers’ criticism of China on various grounds, reports also circulated that the meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping could now take place in April than earlier predicted in March. Also, the US is tightening its grip against China over the alleged human rights violations and could end up harming the prospects of a healthy negotiation forward.
WTI Technical Analysis
Sustained trading beyond $59.00 enables the crude buyers to aim for $60.00 round-figure whereas $61.30 could entertain them afterward.
In a case where prices slip under $59.00, also ignoring the $58.80 support, chances of them revisiting $58.10 and $57.70 can’t be denied.
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