West Texas Intermediate crude prices showed limited movement during yesterday’s session as the ongoing trade war between China and the US has taken a toll on both economies and contributed to weaker global growth. The markets were brimming with optimism last week, as the US and China renewed trade talks after a long break. Previous rounds of negotiations have ended without success, but these talks are taking a different approach, with a focus on achieving a limited deal, which is being labeled “Phase 1”. However, China is saying that additional talks will be needed before a limited agreement is reached. In the meantime, the Trump administration suspended higher tariffs which were set to take effect this week. Still, tariffs that are scheduled to take effect in December remain in place. The level of progress in these talks can have a significant effect on crude prices, since a trade agreement between the two largest economies in the world would re-energize the world economy and increase demand for crude from China and other major economies.
Crude oil prices were under fire during yesterday’s as they dipped below the $53 handle and settling around it after failing to break out in either direction.The price is currently still hovering around the $53 level with the momentum still in the neutral territory. We will be expecting a longer consolidation in the area and the levels to watch will be near support and resistance levels especially the $53.26 resistance level.
Support: 52.5/ 51.83
Resistance: 53.26/ 53.89