- WTI remains on the back foot after easing from eight-year high on Monday.
- French-Russia talks sound optimistic but UK PM Johnson’s comments seem to keep the risk of a war alive.
- US Goods Trade Balance, weekly private inventory data will decorate calendar.
- Headlines surrounding US-China trade deal may also entertain oil traders.
WTI crude oil prices extend the previous day’s pullback from a multi-day high, declining towards $90.00 during Tuesday’s Asian session.
In doing so, the black gold seems to justify the recent pause in the US Treasury yields, after easing from a two-year top on Monday. Also challenging the oil traders are the Sino-American trade tussles and recently downbeat China data. It should be noted, however, that the risk of a Russia-Ukraine war and fears of the OPEC+ members’ inability to meet production hike targets keep the energy buyers hopeful.
The US 10-year Treasury yields steady around 1.92%, close to the highest levels since late 2020, while the US stock future print mild gains around 4,485 at the latest.
That said, the French-Russian talks over Ukraine managed to refrain from any major negatives while the tone of Russian President Vladimir Putin seemed a bit confirmative. However, UK PM Boris Johnson showed readiness to take harsh measures and kept the geopolitical risks of a war on the table.
Read: Despite French efforts, shift in Putin’s tone, fears of Russia-Ukraine war are far from over
Elsewhere, the US conveyed dissatisfaction with China’s performance on the Phase 1 trade deal the previous day whereas Beijing’s downbeat Caixin Services PMI for January added to the bearish impulse. Furthermore, hawkish central bank scenario and indecision OPEC+ performance also tested oil bulls of late.
Moving on, the WTI crude oil traders will pay attention to the US Goods and Services Trade Balance for December, expected $-83B versus $-80.2B, for fresh impulse. Also important will be the industry stockpile report of the API Weekly Crude Oil Stock, prior -1.6445M, for the week ended on February 04.
Technical analysis
Monday’s bearish spinning top candlestick hints at further consolidation of oil gains towards a two-week-old ascending trend line near $87.20. However, WTI crude oil buyers remain hopeful until witnessing a daily closing below October 2021 top surrounding $85.00.
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