Following a three-day decline, WTI halts additional downside as it clings to $53 per barrel during today's early session. While receding tensions between the US and Iran dimmed prospects of an energy supply crunch, doubts over future economic growth, amid trade tension and speculations of the Fed’s rate cut, raised chances of the energy benchmark’s demand depletion. With this, the black gold dropped to the lowest in 16-weeks. Even if escalating trade tussle between the US and China continues to spread worries for the commodity basket, upbeat comments from the Federal Reserve Chairman Jerome Powell during his today’s public appearance might offer an intermediate relief to the energy buyers. It should also be noted that Reuters report cited Mexican authority claiming that nearly $117 billion of additional burden on the US and Mexican economies due to the latest tariffs announced by the US President Donald Trump.
As expected, Crude prices headed to the $54.42 resistant level before heading back to the near lows after recovering a bit from the oversold state. The price is currently hovering just above the $53 level as a huge divergence between the price and the momentum has occurred. From here, we will be focusing on the upside especially on the $55 level.
Support: 52.5 / 51.83
Resistance: 53.26 / 53.89