WTI struggles to cling to recovery gains, edges lower toward $58
|- Saudi Arabia plans to return to full output capacity by the end of November.
- Trump's adviser says President is ready to escalate war if a deal is not reached.
- The United States is expected to impose more sanctions on Iran.
Following Monday's sharp upsurge, crude oil prices staged a deep recovery on Tuesday and Wednesday and the barrel of West Texas Intermediate (WTI) erased nearly 6% during that period. With supply concerns resurfacing, the selling pressure weakened on Thursday and the WTI rose to $59.50.
US President Donald Trump yesterday said that he instructed Secretary of Treasury Steve Mnuchin to "substantially increase" sanctions on Iran to cause the geopolitical tensions in the Middle East to remain high. Moreover, Saudi Arabia said that their ongoing investigation suggested that Iran was behind Saturday's attacks on its crude oil facilities.
Regarding the oil output, Saudi Arabia said that it expects to recover the lost production by the end of September and bring the total output back to 12 million barrels by the end of November.
Focus shifts to US-China trade talks
However, the uncertainty surrounding the US-China trade conflict and its potential impact on the global economy in the second half of the day started to weigh on crude oil prices. As of writing, the barrel of West Texas Intermediate was virtually unchanged on a daily basis at $58.20.
As US and Chinese deputy trade negotiators kick off trade talks for the first time in nearly two months, South China Morning Post today reported that US President Donald Trump's adviser on China, Michael Pillsbury, said that the President was ready to escalate the trade war if they failed to reach a deal soon.
Meanwhile, the weekly data published by the Energy Information Administration on Wednesday showed that crude oil stocks in the US increased by 1.1 million barrels compared to analysts' estimate for a draw of 2.5 million barrels.
Technical levels to consider
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