U.S. crude is trading sideways in the Wednesday session. Currently, crude is trading at $58.20, up $0.04 or 0.10%. Brent crude is trading at $64.37, down $0.06 or 0.09%.
U.S., China to Sign ‘Phase One’
The U.S. and China are scheduled to sign a limited trade deal later on Wednesday. The deal does not eliminate all tariffs between the countries but does mark a partial truce in a bitter trade war that has dampened global growth. The deal is expected to increase trade between the U.S. and China, which could put upward pressure on crude prices, as the U.S. and China are the world’s two largest consumers of oil.
Crude at $58 as Risk Appetite Recovers
Investor risk appetite has made a fast recovery after the recent showdown between the U.S. and Iran raised fears of war in the Middle East and sent crude above $65 per barrel. However, Iran and the United States both stepped down and tensions have significantly eased. With no immediate danger to crude production or supply routes, oil prices have taken a tumble since last week. Crude prices remain under pressure, as crude has broken below the $58.00 this week.
Ahead – EIA Crude Inventories
The EIA (Energy Administration Information) crude inventories report has indicated mostly declines in recent weeks, so last week’s gain of 1.2 million barrels was a surprise, as the estimate stood at -3.4 million. The forecast for the upcoming release on Wednesday stands at a negligible 0.4 million, so if the release is within expectations, crude prices should remain steady.
The line of 58.75 remains an immediate resistance line. The 50-EMA line is close by, at 59.01. This is followed by resistance at the round number of 60.00. On the downside, there is weak support at 58.00. This is followed by a support level at 57.25, which has held since December 3.
This article was originally posted on FX Empire
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