Crude oil trades close to daily high at 54 adding over two dollars as the sharp selloff which started in mid May send prices back to January 2019. Black gold will register the first positive week after three consecutive weeks with loses. The recent US-China trade war escalation and threats that USA will impose tariffs to all Mexican imports pressing oil benchmarks around the globe. This week API report, showed that crude oil stocks in the USA grew by 3.5 million barrels in the week ending May 31, the EIA announced that commercial crude oil inventories rose by 6.8 million barrels in the same period compared to economist’s’ estimate for a draw of 0.8 million barrels. The Baker Hughes Energy Services published earlier showed that the total number of active oil rigs dropped to 789 from 800 last week and helped crude oil preserve its daily gains.
Black gold is in bearish momentum as the previous week has breached all the major daily moving averages. Today the price managed to break above the hourly charts giving a deep breath to bulls, supported by news that Saudi Arabia’s Energy Minister Khalid al-Falih said in a conference in Russia that OPEC should extend oil production cuts. Crude oil immediate support stands at 50.50 the low June 5th while more solid support stands at 48.50. On the upside first resistance stands at 150 day moving average at 56.43 while next resistance stands at 58.52 where the 20 and 100 day moving averages cross.