Having slumped to nearly seven-month low during yesterday’s session, WTI takes a U-turn this morning after hitting the $50.87 support level. Higher than expected prints of the Energy Information Administration’s weekly US Crude Oil Stocks and deterioration of the US-China trade stalemate, after the dragon nation’s another drag to the Yuan fix, seem to have triggered the previous day's decline by the black gold. Early this morning, Bloomberg came out with the report saying that Saudi Arabia is secretly preparing to avoid further declines of the energy prices whereas headlines from Venezuela and Iran indicated an increase in geopolitical tensions emanating from the Middle East. Also supporting the rise could be the improvement in the market’s risk sentiment, as portrayed by the upswing in major yields, and better than forecast July month trade balance data from China.
Crude oil prices headed lower during yesterday’s session reaching the $50.87 support level after loosing momentum, but then took a U-turn and erased most of the losses after pulling away from the oversold zone. The price is currently trading just above the $52.5 support level and looks like the recovery is on its way to extend. We will be focusing on the $53.26 resistance level before we turn our attention to the downside again.
Support: 53.26/ 52.5
Resistance: 53.89/ 54.42