WTI ends the New York session over 3% higher in risk-on markets

West Texas Intermediate spot prices moved between $51.52 to $54.29, ending 3.89% higher on the day, edging its way towards the 20-D EMA. President Donald Trump hinted at progress in U.S.-China trade talks which was later confirmed by Chinese state media which makes the G20 meeting later this month critical. 

In a tweet Tuesday, Trump announced that he had “very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan.” Also, European Central Bank’s Mario Draghi expressed a willingness to cut interest rates which helped U.S. stocks higher which in turn boosted oil prices. A combination of a trade deal between the two nations as well as an easier policy from the ECB and Fed could set the stage for a strong case for the upside.

Additionally, oil is supported from comments from Saudi energy minister Khalid al-Falih in Tokyo, who said the Saudis are “absolutely” confident OPEC and non-OPEC partners will agree to extend their oil production-cut deal. On the flipside, the Middle East is a growing concern. Overnight, it was announced that the Pentagon is sending about 1,000 additional American troops to the region following additional Iranian attacks on two tankers in the Middle East’s Strait of Hormuz last week.

WTI levels

The price remains around the 200 weekly EMA, balancing on a 61.8% Fibo. A break below here opens the 14th Jan 50.41 low and then the 26th November lows at 49.44. There was a bullish tendency on Tuesday and a continuation of the correction opens prospects for the 53 handle ahead of 54.50 and then 55.20 meeting the 20-D EMA.