Crude Oil Floating on Calm Waters
Crude oil prices are slightly lower on Monday. In the North American session, West Texas Intermediate crude oil futures are trading at $57.05, down $0.35 or 0.62%. Brent crude oil futures are trading at $62.44, down $0.20 or 0.32%.
Higher Risk Appetite Boosts Crude
Crude prices climbed 2.3% last week, as investors are showing stronger risk appetite. This is a result of renewed optimism that the U.S. and China could be close to reaching a trade agreement, after a punishing trade war which has damaged the global economy. On Thursday, the Chinese commerce ministry announced that the two countries would phase out the trade war tariffs, but it did not provide a timetable for such a move. The sides appear focused on reaching a limited deal, known as “Phase 1”. This would leave the most intractable issues, such as technology theft, for another round. At the same time, there is downward pressure on crude due to the fact that supplies remain much higher than demand. The U.S. continues to report surpluses in crude inventories, with only one drawdown in the past eight weeks. Last week’s reading of 7.9 million was particularly high and crushed the forecast of 1.9 million.
Crude Technical Analysis
The 50-day and 200-day EMA lines remain relevant. Crude remains above the 50-EMA, which is at 55.59 and is providing short-term support. The 200-EMA is at 56.97, continues to flirt with the candlesticks. On the upside, there is immediate resistance at 57.65. Above, we find resistance at 58.15. On the downside, there is support at the round number of 55.00. This is closely followed by support at 54.50.
This article was originally posted on FX Empire
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