Crude oil prices posted modest gains in yesterday’s trading as risk appetite picked up during the New York session. WTI crude CFD prices opened at $58.82 and rallied to an intraday high of $59.66 on optimism that a US-China trade deal may be inked soon. By the day’s close, crude oil prices had settled at $59.15.
Trump Excited About a Trade Deal
The commodity was able to pare some of the losses it incurred on Wednesday after the Energy Information Administration (EIA) report on inventories. Data showed that crude oil in storage for commercial use was up by 800,000 barrels. It was expected to show a 2.9 million barrel-deficit for the week ending on December 6. This had a bearish effect on crude oil prices as the number hints that demand is unlikely to pick up soon given the surplus in storage.
Then yesterday, US President Donald Trump tweeted that both China and the US want to sign a deal badly. This was also followed by reports that both countries seem to be moving in the right direction of an agreement being finalized soon. For one, it was reported that existing tariffs will be rolled back. Second, the additional levies which are due to be imposed this Sunday will be reportedly canceled. Third, China may have agreed to purchase agricultural products from the US which amount to 50 billion dollars. Market participants are now awaiting official statements from either countries to confirm these reports.
Crude Oil Prices Higher on UK General Elections Result
Earlier this morning, crude oil prices tracked higher on the back on poll results which hinted a strong win by the Conservatives in the UK general elections. The UK Exit poll showed that the Tories may finish with 368 seats in parliament. Results later on confirmed the poll predictions. The latest election results show that Prime Minister Boris Johnson and the rest of the Tories are now up with 271 seats with Labour trailing at 181 seats. There are 650 seats in contest but the current numbers indicate that a Tory-victory is already a done deal.
This news is bullish for crude oil prices because it suggests that a Brexit deal may be passed soon.
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Crude oil price outlook
Crude oil prices look like they are on track to trade higher. On the daily chart, we can see that the price of WTI crude CFDs continues to trade within the rising channel (when you connect the higher highs and higher lows from October 3). If there are enough buyers to sustain the uptrend, we could see crude oil prices breach $60.00 and test resistance at the top of the rising channel around $60.20.
On the other hand, if sellers dominate today’s trading, the commodity could fall to support at the bottom of the channel which is around $56.65. If that level does not hold, crude oil prices may test their month-to-date lows around $54.90.
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