Crude Oil Dips to $56, Investors Eye U.S-China Talks

Crude oil continues to swing in both directions this week, looking for its footing. On Thursday, WTI has lost ground and is trading just above the $56 level.
Kenny Fisher
WTI Crude Oil

Crude oil has recorded slight gains in Friday trade. In the North American session, West Texas Intermediate crude oil futures are trading at $57.41, up $0.35 or 0.62%. Brent crude oil futures are trading at $62.64, up $0.34 or 0.55%.

Will U.S-China Talks Fuel Crude Prices?

There is optimism in the markets that the U.S. and China are close to reaching an interim trade deal, known as “Phase 1”. This would allow the two countries to eliminate trade war tariffs, while leaving the most intractable issues for another round of negotiations. On Thursday, the Chinese commerce ministry announced that the two countries would phase out the trade war tariffs, but it did not provide a timetable for such a move. A new trade deal could significantly boost global trade, which has been hit hard by the ongoing U.S-China trade war. This has reduced the demand for oil, most notably in China, which is the world’s second-largest consumer of oil. If there are further signs that a trade deal is near, this would likely result in an increased demand for crude, creating upward pressure on crude prices.

Crude Technical Analysis

I am keeping an eye on the 50-day and 200-day EMA lines. Crude is just above the 50-EMA, which is at 56.15. The 200-EMA is at 56.96, as it continues to flirt with the candlesticks. Crude broke above this line on Thursday, only to fall back below it in Friday’s Asian session. Crude has tested resistance at 57.65 this week, as this line remains under pressure. Above, we find resistance at 58.15. On the downside, there is support at the round number of 55.00. This is closely followed by support at 54.50.

WTI/USD 1-Day Chart

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.