WTI closed in the red at $54.13 as fears re-emerge of a global economic downturn; with the Chinese economy registering yet another lower than expected PMI figure (49.3 vs. 49.8) and lower factory activity for a sixth straight month, US China trade talks facing another bump in achieving a deal, and widening inventories fueled by a recovering Saudi Arabia. Oil prices are expected to remain under pressure, with the demand side languishing on one side, and oversupply anticipations by the IEA to continue till next year. On a side note, Aramco reported a 9 month net income of $68B, with shares to start trading on December 4th with analysts valuating the company between $1.5T and $1.7T.
Bearish momentum on oil as it is trading in a downtrend parallel channel after testing the upper and lower band of that channel in yesterday's session at $55.50 and $53.71, to close at $54.1. Further downside momentum is expected in today's session as long as price remains below $54.50, with targets set at our resistance levels.
Support: 55.31/ 55.85
Resistance: 56.70/ 57.21