WTI finds support at $66, sticks to modest gains near $66.20
- Concerns over trade conflict don't allow crude oil to make a strong recovery.
- Russia's Transfnet expect exports to Europe to fall 15% in 2018.
Crude oil prices recorded modest gains on Monday but failed to make a deep recovery as investors remain concerned over the potential negative impact of the U.S. - China trade conflict on the global demand for oil. After advancing to a session high of $66.40, the barrel of West Texas Intermediate lost its traction and edged lower toward the $66 mark. However, amid a broad-based USD sell-off, the barrel of WTI recently rose to $66.25, where it was up 0.5%, or 30 cents, on the day.
Bloomberg recently reported that during an event on Friday President Trump complained about the Fed chairman Powell's rate hikes to wealthy Republicans. Furthermore, Atlanta Fed President Raphael Bostic said that the Fed was worried about the flattening yield curve. Responding to these headlines, the US Dollar Index fell below the 96 mark for the first time in 10 days.
According to RIA news agency, Russian oil pipeline monopoly Transneft earlier today announced that it expects oil exports to Europe to be 15% lower in 2018 than it was in 2017. The company further added that oil exports were forecasted to fall by 100K barrels per day this year.
Later this week, investors will be watching the weekly crude oil inventory reports published by the API and the EIA.
Technical levels to consider
The WTI could face the first technical resistance at $66.40 (daily high/Aug. 17 high) ahead of $67.80 (20-DMA) and 68.90 (50-DMA). On the downside, supports are located at $65 (psychological level), $63.60 (Jun. 18 low) and $62 (psychological level/Apr. 9 low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
