Technical Analysis
On the upside, there is a major Fibonacci level at 62.05, followed by resistance at 62.25. Above there is resistance at 63.25. On the downside, the round number of 61.00 is providing support, followed by 59.75.
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Crude Oil Extends Rally, Pressing on $62 Level
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Crude oil has enjoyed a solid Christmas week, posting gains of 2.4 percent. Investors are keeping a close eye on the EIA crude inventory release, which will be published at 14:00 GMT.
Crude prices are pointing upwards for a fourth successive day. Currently, West Texas Intermediate crude futures are trading at $61.94, up $0.16 or 0.27%. Brent crude oil futures are trading at $68.14, up $0.24 or 0.35%.
EIA Forecasts Drop in Crude Inventories
A light economic calendar will wrap up with the Energy Information Administration’s weekly report of crude inventories. The estimate for last week stands at -1.7 million barrels. Although the EIA reports have tended to point to a surplus in inventories in recent months, traders should note that the two of the past three releases have been drawdowns. If the upcoming release is within expectations, crude oil could gain ground before the weekend.
Oil Rises Ahead of Signing of ‘Phase 1’
After two and a half years of a bitter trade war, the U.S. and China are set to sign ‘Phase 1’, which is a limited trade agreement. Under the deal, China and the U.S. have agreed to reduce or eliminate tariffs, and China has agreed to make some structural changes in its trade relationship with the United States. This has boosted investor confidence, as the deal marks the first step in solving the trade war. Although ‘Phase 1’ is only a first step, it nonetheless is an important breakthrough, as the U.S .and China have agreed to suspend tariffs which were scheduled to take effect earlier this week. The deal has raised risk appetite and raised hopes that the two sides will reach another trade accord shortly.
About the Author
Kenny Fisherauthor
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.
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