Crude prices are steady in pre-Christmas trade, as West Texas Intermediate trades just below the $61 level. Traders can expect crude to remain subdued in thin trading on Tuesday.
With a quiet economic calendar as we approach Christmas, crude prices remain subdued on Tuesday. Currently, West Texas Intermediate crude futures are trading at $60.78, up $0.11 or 0.18%. Brent crude oil futures are trading at $66.86, down $0.10 or 0.15%.
Faced with signs of a glut of crude in 2020, OPEC, Russia and other producers recently agreed to cut production in order to support oil prices. Historically, adherence by OPEC countries to production-cut agreements has been spotty, as many producers have tried to protect their oil revenue by exceeding their quotas. On Monday, the Russian oil minister indicated his backing of the agreement, saying that Russia would cooperate with OPEC in order to support the market. This backing from Russia, a major oil producer, could contribute to higher crude prices.
Durable Goods Orders Disappoint
U.S. indicators started the week on a disappointing note, as durable goods orders in November were much weaker than expected. Durable goods orders plunged 2.0% in November, compared to a gain of 0.6% a month earlier. This was shy of the estimate of +0.2%. The core release, which excludes volatile items such as aircraft orders, slowed to 0.0%, down from 0.6% in October. This figure was well off the estimate of a 1.5% gain. The weak durables reports indicate that the manufacturing sector remains soft, which could raise concerns about economic growth. Investors chose to shrug off the disappointing news, as oil prices have remained steady this week.
Oil prices are showing an upward trend, but there are some resistance barriers nearby which could make it difficult for crude to continue climbing higher. On the upside, we find resistance at 61.00 line. Above, there is resistance at 61.50, followed by a major Fibonacci level at 62.05. On the downside, 59.75 is providing support, followed by 59.50.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
