- Summary:
- WTI crude is trading lower today as risk aversion forces crude oil price below $52 on the back of negative trade headlines ahead of US-China trade summit.
WTI crude oil price is trading lower today, with negative US-China trade headlines driving down crude oil price below $52 ahead of API crude stocks data. In the last half-hour, Bloomberg news reported that the White House is considering limiting Chinese stocks that are invested in a government pension fund.
The Chinese Foreign Ministry has responded by saying it will retaliate to any blacklisting of its companies by the US. These comments have triggered an intraday risk-off sentiment, causing European equities to sell off along with Treasury yields and risky commodity assets such as WTI crude.
Riding on the back of the bearish economic indicators of last week, crude oil price is trading at 51.89, which is challenging the 52.28 support level that is formed by lows of January 12, June 3 and August 9.
The WTI crude oil futures on NYMEX will get further near-term price direction from the API crude oil stocks data, scheduled for release later today. However, the bulk of crude oil price impact will come from the US-China trade talks to resume later this week.
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Technical Outlook for WTI Crude
A break of the 52.28 support could open the door for more downside towards support at 50.50 (June 5 and August 7 lows) in the first instance. If price fails to break the 52.28 support, then we may see a bounce and a retest of the 23.6% retracement level (54.20). This level corresponds to the highs of June 7, June 18 and October 7. This is also the site of role-reversed daily lows of the first and third weeks of August 2019.