WTI recovers to $56 as bulls cheer latest trade/political headlines
- WTI buyers cheer geopolitical tension, trade positive news.
- EIA, API registered inventory draws earlier.
- German, Eurozone and the US PMI numbers in the spotlight.
Not only positive signals from the US-China trade but increasing tension concerning the US, Middle East and North Korea keep WTI buyers happy as the energy benchmark recovers to $56.00 during Thursday’s Asian session.
On the trade news, the US President Donald Trump inflated the odds of a deal with the dragon nation by saying that they’re doing “great” with China. Also increasing the chances of a deal might be a push by the International Monetary Fund’s (IMF) warning to the US and China that hiking tariffs only harms both the domestic and global growth.
On the geopolitical front, comments from the US Secretary of State and Defence Secretary and North Korean Foreign Ministry Spokesman recently signalled the escalation of political tension concerning the US, North Korea and Iran.
The black gold earlier had to bear the burden of rising US Dollar (USD), which has a negative correlation with commodities, despite witnessing larger than expected draw in the Energy Information Administration (EIA) inventory data.
As per the EIA’s latest report conveying the US Crude Oil Stocks for the week ended on August 16, stockpiles declined more than -1.889M expectations to -2.732M. Earlier in the week, the American Petroleum Institute (API) also registered increasing drop in the inventory levels.
Investors will now keep an eye over August month Purchasing Manager Index (PMI) numbers from the US, Germany and Eurozone for fresh impulse.
Technical Analysis
50 and 200-day simple moving averages (DMA) near $56.50 and $56.30 can limit the quote’s immediate upside towards monthly top surrounding $57.40 whereas 21-DMA level of $55.37 can keep the declines limited.