Crude Oil Improves on Trade Talk Optimism

Crude oil prices have pushed above the $57 level, after a report that the U.S. and China are on track to phase out trade war tariffs
Kenny Fisher
WTI Crude Oil

Crude oil has posted gains of 1.7% on Thursday, erasing the losses seen on Wednesday. In the North American session, West Texas Intermediate crude oil futures are trading at $56.91, up $0.56 or 1.00%. Brent crude oil futures are trading at $62.23, up $0.48 or 0.76%.

EIA Crude Inventories Shows Large Surplus

The markets have become accustomed to inventory surpluses, and this trend continued with this week’s crude report from the Energy Information Administration (EIA). The surplus of 7.9 million barrels crushed the forecast of 1.9 million. The EIA has reported surpluses in six of the past seven weeks, with some 30 million added to U.S. inventories during that period.

Chinese Tariff Announcement Boosts Crude

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 sign a limited trade deal, 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 tariffs, but it did not provide a timetable for such a move. The announcement has raised hopes that the U.S. will cancel a tariff which is scheduled to take effect on Dec. 15 on some $156 billion worth of Chinese products. If a deal is signed, global growth would receive a big boost, which would likely send crude prices to higher ground.

Crude Technical Analysis

Traders should keep an eye on the 50-EMA, which continues to provide support, indicative of an upward trend. Currently, this line is at $55.15. Below there is support at $53.00. On the upside, there is resistance at the $58.00 level.

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.