While trade positive news stops stops WTI declines for now, the expected recovery in the UK-Iran relations and doubts over the strength of global economy keep prices in check while portraying $55 during today’s early morning session. The energy buyers cheered the South China Morning Post news that Beijing sees a positive signal in the US President Donald Trump’s latest delay of tariffs on some of the Chinese goods. Adding to the optimism was the President Donald Trump’s tweets that took a U-turn from previous warning that China should stay away from Hong Kong crisis. On the contrary, inversion of the US 10-year and two-year Treasury yields renewed the fear of 2008 financial crisis and tamed Oil demand. Also exerting the downside pressure is the UK’s expected decision to release Iranian oil tanker later in the day. Further on the bearish side, the report from EIA showed an increase of 1.580 million barrels of inventory versus expected declines of -2.761 million barrels.
Crude oil headed south during yesterday’s session traveling from a high of $57.73 per barrel to a low of $53.95 after entering the overbought zone. The prices made a recovery and are now trading above the 55 level. The momentum looks like it’s getting picked up again and therefore we will be focusing on the upside especially the $55.92 resistance level.
Support: 56.27/ 55.73
Resistance: 56.69/ 57.40