Crude oil prices have gained ground in Wednesday trade. In the North American session, West Texas Intermediate crude oil futures are trading at $57.06, up $0.83 or 1.49%. Brent crude oil futures are trading at $62.04, up $1.06 or 1.74%.
API Crude Inventories Boost Crude, EIA Next
Crude inventories are a useful gauge of tracking supply and demand for crude, which can lead to significant movement in oil prices. On Tuesday, the American Petroleum Institute (API) estimated a crude drawdown of 3.72 million barrels, higher than the forecast of a drawdown of 1.79 million. This marked the sharpest drawdown since September. Later on Wednesday, the Energy Information Administration (EIA) will release its weekly report, with an estimate of -1.6 million. If the EIA also points to a large drawdown, oil prices could move even higher.
Investors Eye Trade Tensions
Temperatures are rising between Beijing and Washington, which could delay progress on the trade talks front. The U.S. Congress is taking steps to sanction Chinese officials for human rights abuses of the Uighar Moslem minority. In retaliation, Chinese officials are reported to have prepared a list of “unreliable entities”, which could be a broad hint that some U.S. companies will face sanctions. As well, U.S. President Trump told reporters that a trade agreement with China could be delayed until after the U.S. election in 2020. If there are further signs of trouble at the trade talks, crude could reverse directions and lose ground.
WTI/USD pushed above resistance at 56.50 in the Asian session. The 200-EMA line is at the 57.00 line, followed by resistance at 57.50. On the downside, we have resistance at 56.50, with the 50-EMA line close by at 56.30. Below, there is support at 54.50.
Note that the 50-EMA and 200-EMA lines are in close proximity and could converge. If the 50-EMA crosses above the 200-EMA line, this would be a bullish signal (“golden cross”).
This article was originally posted on FX Empire
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