West Texas Intermediate crude prices are firm during today’s early session following a solid performance at the end of last week as risk appetite picked up due to the phase 1 trade agreement between the US and China. The news last week of an explosion in an Iranian tanker also propped up prices as tensions in the Middle East encouraged a spike in the value of oil. Adding to this are the tensions between Turkey and Syria, however, oil prices are somehow still facing bearish pressure as markets have discounted geopolitical risk premium, as the perception that the world will soon be flooded with oil is removing any urgency to load up on inventories.
Crude oil prices performed an impressive recovery from their lows of $51.4 per barrel during last week, printing a high of $54.91 before sliding back below the $54 handle this morning. The price is currently trading just above the $52.89 support level with the momentum retreating from the bullish territories. We will be focusing further on the downside with the $53.26 support level as a possible target.
Support: 54.42/ 53.89
Resistance: 55.05/ 55.92