Although API’s weekly inventory data failed to entertain oil bulls, renewed trade optimism, escalated tension amid US and Iran, helps WTI to remain firm around $56.30 this morning after gaining traction during yesterday’s session. The quote initially benefited from news headlines concerning the US-Iran tussle. The US announced another sanction against Iran and is also likely not to support the French proposal of availing multi-billion credit line for the Iranian nation as a part of its “maximum pressure” policy. The black gold’s upside got additional fuel after Reuters shared details of the phone call between China’s Vice Premier Liu He, the US Trade Representative Robert Lighthizer and the Treasury Secretary Steve Mnuchin. Trade representatives of the world’s two largest economies agreed to restart trade negotiations in October with mid-September consultations to create good conditions prior to the actual meet in Washington. Crude buyers shrugged off the American Petroleum Institute’s weekly US Crude Oil Stock report that mentioned an increase of 0.401 million barrels to the inventories versus the previous decline of -11.100 million barrels of contraction.
Crude prices gained traction during yesterday’s session and bounced back above the 56 level to challenge the trend line represented on the chart. The price is currently struggling to stay above the 56.27 resistance level however the momentum is still bullish. A simple consolidation in this area would help the prices to print higher highs as the break above the trend line will be confirmed.
Support: 55.92/ 55.06
Resistance: 56.27/ 56.79