Crude Oil Prices Steady for Third Successive DayThere is little change in crude prices on Tuesday, which remains range-bound. In the North American session, West Texas Intermediate is trading just above the $57 level.
Crude oil has posted small gains on Tuesday. In the North American session, West Texas Intermediate crude oil futures are trading at $57.26, up $0.35 or 0.62%. Brent crude oil futures are trading at $62.64, up $0.34 or 0.55%.
Investors Eye U.S-China Trade Talks
Investor risk appetite remains high on renewed optimism that the U.S. and China could be near a trade agreement, which would end the bitter trade war between the world’s two largest economies. The huge tariffs which each side has imposed continue to take a toll on the Chinese economy and have dampened the global economic picture as well. Manufacturing sectors in the U.S., China and Europe continue to sputter, and the global demand for crude has dropped. This has put downward pressure on oil prices. If the trade war were to end, the demand for oil would increase sharply, resulting in higher crude prices. Thus, the success of the trade negotiations will play a crucial role in the movement of oil prices.
Another important factor which is having a significant impact on oil prices is U.S. crude inventories. The Energy Information Administration (EIA) weekly crude oil reports have indicated ongoing surpluses, with only one drawdown in the past eight releases. The next report will be released on Thursday. Another surplus could weigh on crude prices.
Crude Technical Analysis
Crude prices remain range-bound this week. We find resistance at 57.65, which was tested last week. Above, we find resistance at 58.15. As well, the 200-EMA continues to flirt with the candlesticks and is currently located just below crude. On the downside, I am keeping an eye on the 50-EMA, which is at 55.64, is acting on support. Below, there is support at the round number of 55.00.