Crude prices have moved higher for a fifth successive day, as a strong U.S. economy and optimism over the U.S-China trade deal have boosted oil prices this week.
Crude oil continues its slow-but-steady path upwards. Currently, West Texas Intermediate crude futures are trading at $60.81, up $0.26 or 0.48%. Brent crude oil futures are trading at $66.10, up $0.24 or 0.39%.
Investors have been lukewarm in their enthusiasm for the ‘Phase 1’ trade agreement with China. President Trump claimed that as part of the agreement, China has committed to purchase some $50 billion in U.S. agricultural products, but there was no confirmation from Chinese officials. Even with the agreement, the U.S. will continue to impose 25% tariffs on $250 billion of Chinese imports, along with a 7.5% tariff on another $120 billion of Chinese products. Still, the deal should raise global growth, which has been dampened by the bitter trade war. China and the U.S. are the world’s largest consumers of oil, and crude prices have risen 1.75% since the deal was announced on Friday. Crude has climbed 9.6% in December and is showing upward momentum.
The Energy Administration Institute (EIA) released its weekly crude inventory estimate earlier on Wednesday. The EIA reading came in at -1.1 million barrels, above the forecast of -1.5 million. The EIA has pointed to mostly surpluses in the third quarter, but has posted two declines in three weeks. This could point to a reduction in the oversupply of crude oil, which would put upward pressure on crude prices.
Crude continues to show upward movement. Earlier in Wednesday, WTI/USD crossed above the 61.00 level for the first time since mid-September. There are more resistance lines close by, at 61.50 and 62.25.
On the downside, 58.50 has some breathing room in support as the pair has moved higher. Below, there is support at 57.50. Note that the 50-EMA crossed above the 200-EMA on Tuesday, which is a bullish sign for crude.
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.
