Crude Oil Steady at $57, EIA Inventory Report Looms

Crude oil is steady in Thursday trade. In the North American session, West Texas Intermediate crude oil futures are trading at $57.63, up $0.28 or 0.49%. Brent crude oil futures are trading at $63.24, up $0.42 or 0.70%.

Trump Sends Mixed Messages on Trade War

President Trump weighed in on the trade war with China this week, but investors can be forgiven for being perplexed after contradictory remarks from the U.S. President. There is renewed hope that the sides will reach an interim deal, known as “Phase 1”. Trump sent a combative message on Tuesday, with a threat that tariffs on China would be raised “very substantially” if the sides failed to reach an agreement. At the same time, Trump added that a “Phase 1” deal could “happen soon”. The unpredictable Trump could well be employing a “carrot and stick” approach in the trade negotiations with China. Both sides are interested in reaching an agreement – China’s economy is gripped by a slowdown, while a trade deal with China would be a big boost for Trump ahead of an election campaign.

API Reports Surplus, EIA Next

Investors are focused on U.S. crude inventory reports. On Wednesday, the American Petroleum Institute (API) weekly report showed a surplus of 0.5 million barrels. This was shy of the forecast of 1.6 million. Later in the day, the Energy Information Administration (EIA) report will be released. The EIA has reported only one drawdown in the past seven weeks, and the past two weeks have seen large surpluses, with readings of 5.9 million and 7.9 million, respectively. This points to large stockpiles, which has put downward pressure on crude prices.

Crude Technical Analysis

Crude continues to put pressure on resistance at 57.65 and tested this line in the European session. Above, we find resistance at 58.15. On the downside, crude is trading slightly above the 200-EMA, at 56.98. This line could act as short-term support. Below, we find support at the round number of 55.00.