- Doubts over future economic growth and the Fed’s monetary policy weaken the energy benchmark.
- API data and fresh political clues awaited for further direction.
Following a three-day decline, WTI halts additional downside as it clings to $53.00 during early Tuesday.
While receding tensions between the US and Iran dimmed prospects of an energy supply crunch, doubts over future economic growth, amid trade tension and speculations of the Fed’s rate cut, raised chances of the energy benchmark’s demand depletion. With this, the black gold yesterday dropped to the lowest in 16-weeks.
Even if escalating trade tussle between the US and China continues to spread worries for the commodity basket, including crude, upbeat comments from the Federal Reserve Chairman Jerome Powell during his today’s public appearance might offer an intermediate relief to the energy buyers.
It should also be noted that Reuters report cited Mexican authority claiming that nearly $117 billion of additional burden on the US and Mexican economies due to the latest tariffs announced by the US President Donald Trump.
Other than political plays, weekly crude oil stock data from the American Petroleum Institute (API) for the week ended on May 31 will also entertain WTI traders. As per the private survey data, the inventory level previously dropped by -5.265 million barrels.
Technical Analysis
FXStreet Analyst Flavio Tosti says that $53.00 is the level to beat for bears while upside capped by 55.00 resistance:
WTI is under selling pressure below its main SMAs. A beak below 53.00 can open the doors to 51.00 a barrel to the downside. Resistance is seen at 55.00, 57.00 and 59.80.
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