U.S. Crude Climbs on EIA Inventory DrawdownCrude oil is close to 1.0% higher on Thursday, courtesy of an unexpected drawdown in the EIA crude inventory report.
U.S. crude has posted gains in the Thursday session. Currently, crude is trading at $58.65, up $0.54 or 0.94%. Brent crude is trading at $64.72, down $0.44 or 0.65%.
Trump Touts “Phase 1” Deal
The U.S. and China signed the Phase 1 deal, which is a limited trade agreement. For President Trump, it represents a major achievement, one that he is sure to remind voters during the 2020 election campaign. Under the trade deal, China has agreed to purchase more U.S. goods and services. However, the trade war is far from however, as a significant portion of U.S. tariffs against China will remain in effect. The deal is limited in scope and does not address Chinese subsidies for state-owned enterprises, which U.S. businesses have long complained has resulted in an unfair playing field.
EIA Reports a Surprise Decline
The EIA (Energy Administration Information) crude inventories report has indicated mostly declines in recent weeks, and this was the case again on Wednesday, as inventories fell by 2.5 million barrels last week. Analysts had expected a small gain of 0.5 million, and crude prices have responded with gains on Thursday.
Retail Sales Improve in December
Retail sales, the primary gauge of consumer spending, were positive in December. The headline reading improved to 0.3%, up from 0.2% a month earlier. Core retail sales impressed with a gain of 0.7%, above the estimate of 0.5%. The strong numbers were a result of a late-holiday shopping spree by consumers.
The line of 58.75 remains is under strong pressure in resistance. The 50-EMA line is close by, at 58.96. This is followed by resistance at the round number of 60.00. On the downside, there is weak support at 58.00. This is followed by a support level at 57.25, which has held since December 3.