WTI sold-off at $ 55 on mixed US-China trade headlines
- Oil bounces in sync with risk sentiment on hopes of easing US-China trade war.
- But contradictory US-China trade statements cap the oil-price recovery.
- Focus on trade developments and US weekly crude supplies report.
WTI (futures on Nymex) is seen fading an uptick to 55.00 levels over the last hour, dragged lower by a retracement in risk assets again, as the US President Trump-led hopes of easing US-China trade war concerns were negated by the latest contradictory remarks from China.
US-China trade war escalation risks global recession
Earlier today, Trump said that China’s trade team called the US negotiators last night and said that they want to come back to the negotiating table, adding that “we have had two calls with China, they want to make a trade deal”.
However, the Chinese Foreign Ministry and Global Times were quick to report that they weren’t aware of any such phone calls that took knocked off the risk recovery, with Oil traders sending prices back to mid-54s.
The black gold hit 11-days lows at 52.98 in Asia this Monday, as risk-aversion swept off the markets amid US-China trade escalation and weighed heavily on the higher-yielding oil. The prices staged a goodish-recovery in early European trading amid reconciliatory trade comments by both the US and Chinese trade officials.
Looking ahead, the sentiment around the barrel of WTI will continue to get influenced by the US-China trade developments. Markets fear that intensifying US-China trade war could have a major impact on the global economy, in turn negatively affecting the energy demand outlook.
WTI Levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
