- 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.
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