Despite the White House optimism, some issues remain, such as the scale of Chinese purchases of U.S. agricultural products. U.S. President Trump insisted that China would buy $50 billion worth of U.S. farm goods “pretty soon”. However, Ting Lu, chief China economist at Nomura, noted that “the scale of purchases seems implausible and Chinese officials were reluctant to mention any specific target during their press conference.” The agreement has led to immediate dividends – the U.S. held off from implementing new tariffs on Sunday and China also agreed not to apply retaliatory tariffs. Crude oil prices moved higher last week and have sparkled in December, climbing 8.3 percent. After an exhausting trade war that has dampened the global economy, a trade deal, even if limited, should boost economic growth and put upward pressure on oil prices.
Technical Analysis
WTI/USD is currently testing the 60.00 level, which has psychological significance. This line was breached on Friday for the first time since mid-September, so a break above this line could give crude strong upward momentum.
On the downside, 58.50 has some breathing room in support as the pair has moved higher. Below, there is support at 57.50. The 200-EMA is at 57.17, followed immediately by the 50-EMA at 57.14. If the 50-EMA crosses above the 200-EMA, it would be a bullish signal for crude.
