WTI remains weak below $57.00

  • The WTI lost almost 1%, falling back below the $57.00 mark.
  • OPEC+ is unlikely to deepen production cuts.
  • Trade headlines between the United States and China remain in focus.

Prices per barrel of the US benchmark for light sweet crude oil started the week on the defensive and are trading at levels below $57.00.

WTI lower due to trade concerns

The prices of the West Texas Intermediate fell below $57.00 a barrel and traded defensively on Monday as traders continue to closely monitor developments in the U.S.-China trade scenario,

In fact, President Trump poured water on Friday on the (overdone?) optimism surrounding the “phase one” deal with China, pointing out that there is still no decision on a renewal of the existing tariffs.

Also weighing on traders’ mood today, OPEC+ all but ruled out deeper oil production cuts at its December meeting, even though the cartel will likely extend the current deal.

Other news noted that driller Baker Hughes reported another drop in US oil rig counts over the past week, this time from 7 to 684 active oil rigs.

Later in the week, the usual weekly reports on US crude oil supplies from API and EIA are due on Tuesday and Wednesday, respectively.

What to look for around WTI

WTI prices once again failed to break above the critical 200-day SMA in the region of $57.30 on a sustainable note, leaving last week’s highs at levels just short of the 58 mark, $00 a barrel. Trade developments between the United States and China remain the almost exclusive driver of crude oil prices in the short term at least, while speculation continues to swirl around the likelihood of removing some of the existing tariffs and the timing of the signature of the “Phase One” agreement. On the negative side, another large increase in crude oil supply in the United States has shaken the mood of traders, in line with pessimistic headlines from next month’s OPEC+ event.

Significant levels of WTI

Right now, WTI barrel is down 0.73% to $56.82 and a breakdown of $56.03 (100-day SMA) would expose $55.56 (55-day SMA) and finally 53.71 $ (low from October 31). On the upside, the next resistance lines up at $57.50 (November 5 monthly high), followed by $60.00 (psychological high) and then $60.94 (July 11 monthly high).

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Felix J. Dixon