Crude oil prices traded around the $58.00 psychological handle for the most part of Friday’s trading. WTI crude inched higher to $58.61 after opening at $58.17. However, towards the end of the New York session, crude oil prices traded lower and finished at $57.76. As of this writing, WTI crude is trading around $57.74.
There were no industry-specific news released on Friday which left the commodity at the mercy of market sentiment. This means that if we do not get any updates regarding the upcoming OPEC meeting in December, crude oil prices will likely take their cue from news on the US-China trade negotiations.
The latest forex news over the weekend was that Robert O’Brien, who is the U.S. national security adviser, announced that a phase one deal could still be possible by end of year. This follows after US President Donald Trump said that they are close to a deal and Chinese President Xi Jinping announced that he looks forward to coming into terms with the US. These remarks may explain why crude oil prices were able to hover around their 2-month highs on Friday.
However, it’s worth noting that we have yet to hear tangible developments on the ongoing negotiations. In fact, the two head of states have also expressed caution. President Trump said that he has not yet decided on anything in terms of dealing with China. Meanwhile, President Xi has said that they are not afraid to retaliate in this trade war which the US started.
WTI crude is testing support at previous resistance (highs for November 6, November 7, November 14, and November 18). This price also coincides with the 23.6% Fib level, drawing from the low of November 20 to the highs of November 22. If risk appetite continues or news that OPEC will meet on higher production cuts could send crude oil prices higher. You can look at $59.48 for resistance, where the commodity hit a high in May 2019. On the other hand, a break of support could send crude oil prices to their November lows around $56.20.Download our latest quarterly market outlookfor our longer-term trade ideas.
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