WTI corrects from channel lows and target a break to the 21-DMA

The price of a barrel of oil has been inching higher in recent trade, advancing 0.23% on the session from a low of $55.91bbls to a high of $56.18bbls in WTI. However, the moves do not reflect the bigger picture considering the slide from the close proximity of the $59 handle at the end of last month. 

The outlook is a mixed one for oil. To start the week, oil prices were buoyed following a rebound in manufacturing activity for China as well as the potential for OPEC and its allies to agree on deeper production cuts ahead of this week's meeting. The news sentiment comes in contrast to prior Saudi comments where they were no longer willing to compensate for OPEC cheaters. In other weekend news from Iraq, it suggesting OPEC+ will consider deeper cuts, supporting a correction in oil prices.

Trump will increase tariffs if a trade deal with China cannot be reached

Meanwhile, on the trade front, US Commerce Secretary Ross overnight said Trump will increase tariffs if a trade deal with China cannot be reached. This was a blow for markets which sent US benchmarks ono the weaker side of the balancing scales and consequently hurt oil prices as well. The weak US economic data also added to the gloom with US construction spending in November falling for the fourth consecutive month. 

WTI levels

The price is embarking on a correction of the slide from below the 200 and 50hour moving averages. The rising channel's rules would expect the price to be supported ta the overnight session lows, and bulls will look for a close above the 21-day moving average located at 56.77 for prospects of the 59 handle again. A break of trendline support opens risk to end of October lows at 55 the figure.