Crude Oil Price Surge: Next Move Depends on US-China Trade Talks
Crude Oil News, Price, Chart and Analysis:
- Brent crude oil remains bid around $60.00/bbl. for now.
- China says it will strive to make progress in talks with the US.
Q3 2019 Forecasts and Top Trading Opportunities
Crude oil spiked 4% yesterday and back to highs not seen in around one month on better-than-expected Chinese economic data and news that the People’s Bank of China (PBoC) would soon introduce more bank reserve requirement (RRR) cuts to help stave off the ongoing economic headwinds. These broad and targeted RRR cuts will help boost the domestic economy and help drive demand for energy.
US-China trade talks may also soon take a turn for the better after the Chinese Commerce Minister said that China will strive to achieve real progress with the US during high level meetings in October. Any easing of the current trade war between the world’s two largest economies would again fuel a bid in the oil market. However, while Chinese comments may be mildly positive, it will take a lot of work to bring the two sides closer to an agreement, especially after the recent round of trade tariffs introduced at the start of the month.
US crude oil traders should also take note of this afternoon’s DOE oil inventory data, released at 15.00 GMT.
Brent crude currently trades just over $60/bbl. and needs to consolidate after Wednesday’s 4% spike which helped push the CCI indicator into overbought territory. The downside looks relatively well supported all the way down to $55.00/bbl. while a break and close above the $61.30 - $61.45/bbl. (August 13 and August 5 highs respectively) could see crude oil push towards two old highs at $62.90/bbl. and $64.50/bbl. before the 200-day moving average at $65.00/bbl. comes into play.
Crude Oil Daily Price Chart (January – September 5, 2019)
IG Client Sentiment data show that 57.5% of retail traders are net-long US crude oil, a bearish contrarian indicator. However, recent daily and weekly positional changes give us a mixed trading outlook.
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