US/China Talks Lift Crude
Crude prices are turning higher again today following a reversal from the current weekly highs printed yesterday. Cautious optimism around the revival of US-Sino trade negotiations is helping underpin bullish sentiment with crude likely to see firmer prices in response to any further, positive headlines on the trade front. If negotiations continue and traders get a sense that a proper trade deal might be coming during the current 90-day negotiations window, this should see a sharp uptick in oil prices near-term. However, any fresh stalling of talks or a return to a more hostile tone between the US and China will leave prices vulnerable to a reversal lower.
EIA Inventories & Outlook
Looking ahead today, traders will be watching the latest EIA inventories data for a fresh glimpse into the US demand environment. A large, unexpected drawdown last week helping lift prices with bull shopping for a similar result this time. In its latest short-term market outlook, the EIA this week forecast lower oil prices as a result of the higher trend in inventories data over the year. The report also cites slowing global demand growth and continues production increases as a factor which should hamper prices over the remainder of the year.
Technical Views
Crude
The market is fighting to hold above the bear channel highs and the 63.83 level following the breakout move this week. While above here, focus is on a test of the 67.45 level next, in line with bullish momentum studies. To the downside, 57.42 is the next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.