WTI stuck in range around $ 58 despite trade optimism
- Oil consolidates Friday’s surge to two-month highs.
- The bulls are divided between broad USD strength and trade optimism.
- Focus is shifting towards the Dec OPEC+ meeting amid impending trade talks.
WTI (oil futures on NYMEX) posts small gains near $ 58 mark in the European session this Monday, lacking a clear directional bias despite improved risk appetite on fresh US-China trade optimism.
However, the sentiment around the black gold remains somewhat underpinned by the fresh hopes of a US-China trade deal following the recent upbeat comments from the US and China while Beijing’s gesture to raise the penalties on the Intellectual Properties (IP) theft also rekindled expectations of a trade truce.
The gains in the barrel of WTI remains capped mainly due to broad-based US dollar strength, driven by the rise in the US Treasury yields amid a risk-on market profile. The US dollar index bounces back to test the weekly tops of 98.30, modestly flat on the day. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.
Meanwhile, the bulls were also left unimpressed by the latest CME OPEC Watch Tool that showed that the OPEC+ is likely to leave the output cut policy unchanged when it meets in Vienna on Dec, 5. CME OPEC Watch Tool: Probability of OPEC+ maintaining output cuts stands at 81.51%
Markets now await the US weekly crude supply reports and fresh developments on the US-China trade front to gauge the next direction in the commodity.
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.
