- WTI steps back from 13-week top of $36.04 flashed early in Asia.
- OPEC+ to pre-pone meeting, calls for 1-2 month extension to current output cuts are on the hike.
- US and China remain at loggerheads, riots in America add to the geopolitical worries.
- China’s Caixin Manufacturing PMI can offer immediate direction to energy prices.
WTI eases from the highest since March 11 to $35.20 during Monday’s Asian session. Upbeat sentiment surrounding the Organization of the Petroleum Exporting Countries (OPEC) and its allies, mostly known as OPEC+, earlier helped the black gold to refresh multi-day high to $36.04. However, fears of escalating US-China tensions seem to have challenged the energy bulls off-late.
As per the energy intel reports conveyed by Amena Bakr, “the OPEC+ could meet on June 4 to decide on a market management policy that might extend the current production cut pact by up to two months."
The oil producers’ group was earlier scheduled to meet on June 09 to re-discuss the extension of 9.7 million barrels of output cut that was agreed to take place till June 01.
China seems not in a mood to appreciate US President Donald Trump’s step-back from any fresh sanctions, as feared, during the Friday’s conference. The reason could be spotted in the South China Morning Post (SCMP) article highlighting the dominance of groups calling for more ‘fighting spirit’.
Also adding to the tension could be the latest comments by US Secretary of state Mike Pompeo. The Trump administration appeared for an interview with Fox News during the weekend and said, “this is a Chinese communist party that has come to view itself as intent upon the destruction of western ideas, western democracies, and western values.” It was also mentioned that the Chinese Communist Party’s military advances are real and that President Trump will always keep us in a position where we can protect the American people.
It should also be noted that riots in some of the American states and downbeat figures of China’s NBS Manufacturing PMI added weakness into the black gold.
Though the bears aren’t in dominance as China’s Caixin Manufacturing PMI for May, expected 49.6 versus 49.4, is still not out. Also stopping the sellers could be the wait for the US activity numbers and further clarity over the US-China relations.
Technical analysis
Unless providing a daily closing beyond March 11 top near $36.65, bulls are less likely to get a confirmation in filling the gap between $41.21 and $35.08. On the contrary, the quote’s downside break of an ascending trend line from May 14, at $33.00 now, could trigger fresh fall towards $30.00.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD climbs to 10-day highs above 1.0700
EUR/USD gained traction and rose to its highest level in over a week above 1.0700 in the American session on Tuesday. The renewed US Dollar weakness following the disappointing PMI data helps the pair stretch higher.
GBP/USD extends recovery beyond 1.2400 on broad USD weakness
GBP/USD gathered bullish momentum and extended its daily rebound toward 1.2450 in the second half of the day. The US Dollar came under heavy selling pressure after weaker-than-forecast PMI data and fueled the pair's rally.
Gold rebounds to $2,320 as US yields turn south
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.