WTI registered its largest intraday swings in a month on Friday, from a low of $55.74, a high of $57.44 to close at $57.34. Uncertainty is dominating energy prices as the trade talks between U.S and China develop. On one hand, Bulls are already pricing in a positive conclusion for the phase one deal, with the issue becoming more of a matter of “when” the trade deal happens rather than “if” it does. On the other, rumors emerged of internal U.S administration members opposing the tariffs rollback with President Trump stating that he is not considering rolling back on all the tariffs. The latter combined with weak economic figures out of China and oversupply conditions is pressuring the oil rally.
WTI broke the medium term uptrend, forming a lower high and is trading below the 20 and 50 period SMA. An hourly close below $56.50 combined with prices printing below the moving averages will keep bearish momentum in play with our support levels as respective targets.
Support: 56.22/ 55.85 / 55.50
Resistance: 56.58/ 57.21/ 58.19