Despite latest negative news concerning the US-Iran geopolitical tussle, WTI remains defensive as prices trade below the $52 level. The US recently sent additional 1,000 troops to the Middle East in order to counter threats from Iran after recently alleging the OPEC member’s role in the Oman attacks. Though, the black gold showed little reaction to the news. The reason could be likely chances of increased global economic damages due to the on-going trade war between the US and China. While Bloomberg’s news report suggesting a decline in China’s holding of the US Treasuries raised fears for further escalation in the trade war, the American Chamber of Commerce said that the US and China need to agree over the trade deal in G20 and end the public blame game. Other than political plays, today’s API weekly crude oil stock report will also gain trader’s attention.
Crude prices failed to gain traction since Friday and instead traded in a tight range which is being currently violated to the downside. The price is currently trading just below the $51.83 resistance level as the momentum is shifting from being neutral to bearish. The downside looks more probable at this moment, that is why we will be focusing on the crucial $50.87 support level.
Support: 51.83 / 50.87
Resistance: 52.5/ 53.87