Increasing trade tensions between the US and China join lack of fresh catalysts from the energy sector dragged WTI prices towards the $58.3 per barrel during today's early session. The return of the US traders from the extended weekend was welcomed with the five-month low Dallas Fed manufacturing index while the US-China trade rift also weighed on the black gold. After the US President Donald Trump’s frequent threats that signal China might have to bare more in the trade rift, the dragon nation have started retaliating with indications to give troubles to the world’s largest economy by availing lesser rate earth metals that are crucial mainly for the technology sector and China is the world’s biggest producer of them. While trade tensions are going to dominate near-term price sentiment of the energy benchmark, a weekly release of the American Petroleum Institute’s US crude oil stock for the week ended on May 24 will also be in the spotlight.
After failing to break above the $59.28 resistance level, Crude oil prices edged lower to get closer agin to the oversold zone with a potential to retest recent lows. The price is currently hovering around the $58.4 level with the nearest support level locating at the $58.02 level. We will be focusing on potential upside move triggered by a potential divergence between the price and the momentum. The $59.28 resistance level is the level to watch.
Support: 58.02 / 56.69
Resistance: 59.28 / 59.99