WTI remains on the road to recovery amid geopolitical tension

  • The US President Trump’s U-turn on trade tariffs joins likely supply crunch and geopolitical catalysts to help WTI recover.
  • Activity data from global majors, trade/political headlines will be the key to watch.

While Friday’s comments from the US President Donald Trump helped trigger WTI recovery, the energy benchmark holds the strength amid geopolitical tension surrounding the Middle East as it trades near $55.30 during the initial Asian session on Monday.

Having announced 10% tariffs on China’s goods worth $300 billion, effective from September 01, the US President Trump took a U-turn from previous comments on Friday while saying that the tariffs can be delayed/canceled if China promises to move forward on trade between now and their next scheduled meeting in September.

Not only trade news but a fifth consecutive weekly fall in the US oil rig count, as reported by the Baker Hughes, also favored the black gold’s pullback from a fortnight low.

During the weekend, Iran again grabbed market attention by seizing an oil tanker and seven sailors on the charges of “smuggling”. The same is third such seizure by Iranian revolutionary guards in a month and flashes warnings to global oil players using the Persian Gulf as a route.

Traders will now look forward to Services/Non-Manufacturing Purchasing Managers’ Index (PMI) data from China, Eurozone, the UK and the US for fresh impulse while keeping an eye over trade/political headlines.

Technical Analysis

Even if $55.80/$56.00 can be considered as immediate resistances, 200-day moving average level of $56.70 becomes the key upside barrier for prices, which in-turn keeps highlighting medium-term support-line of $53.60 and June month low $50.60 on the bears’ radar.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

GBP/USD attempts recovery amid as Johnson's condition is in focus

GBP/USD is trading above 1.23 as the focus remains on PM Johnson's condition. The 55-year old is in intensive care, receiving oxygen and Foreign Secretary Raab is in charge.


EUR/USD rises toward 1.09 amid a better market mood

EUR/USD is trading closer to 1.09, up amid falling coronavirus cases in the old continent and as German industrial output beat expectations with 0.3% for February. New US fiscal stimulus is also eyed.


Crypto starship starts the engines, pointing beyond limits

The bullish scenarios are fulfilled and bring the Top 3 to the launch pad. Ether's dominance shoots up and improves by more than 10% in a single day. The movement shows strong potential not seen since the 2017 bump.

Read more

Gold corrects from multi-week tops, slides further below $1650 level

Gold finally broke down of its Asian session consolidation phase and dropped to fresh session lows, around the $1645 region in the last hour.

Gold News

WTI stays relatively calm near $27 as markets wait for fresh clues on output cuts

Crude oil prices started the week on the back foot with the barrel of West Texas Intermediate (WTI) erasing 8.75% on a daily basis to close at $26.28.

Oil News