WTI bounces off 7-day old support-line amid mixed growth concerns
|- WTI heads to short-term key moving averages (MA) as markets cheer latest risk-on.
- Comments from the US President, OPEC report and likely additional easing from the PBOC play their roles.
With last weekend’s risk-on carrying forward, WTI rises to $55.00 during Monday morning in Asia. The energy benchmark recently took advantage of the US President Donald Trump’s comments and expectations of further easing from China’s central bank while portraying the aftershocks of OPEC’s latest report.
In its monthly Oil Market Report, the Organization of the Petroleum Exporting Countries (OPEC) cuts forecast for 2019 global oil demand growth to 1.10 million barrels per day (bpd) versus the previous forecast of 1.14 million bpd. In addition to announcing only a marginal impact of likely global slowdown, the oil cartel upwardly revised 2020 demand.
Recently, the US President Donald Trump turned down expectations of an economic recession while news took the rounds that the People’s Bank of China (PBOC) is to release a new reference rate for bank loans and should see lower rates for business borrowings.
Additionally, the Forbes report of a weekend attack over the Saudi Aramco’s oil facility at Shaybah adds strength to the momentum.
Weighing the upside is on-going pessimism surrounding the US-China trade deal that recently worsened after the US President challenged China’s Hong Kong moves and termed Huawei as the national threat.
Moving on, investors will follow near-term growth directions and supply concerning clues for fresh impulse amid a lack of data/events on the economic calendar to publish.
Technical analysis
The seven-day-old rising support-line at $54.80 acts as immediate support, a break of which can drag prices to August 15 low of $53.77, $53.00 and then to monthly bottom close to $50.50. Alternatively, an upside clearance of July 26 low near $55.80 can propel prices to the monthly high of $57.40.
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