With prices now, only a ‘stone’s throw’ (away) from the $57.00-45 broad support line, the West Texas Intermediate crude bears are expected to take a breather.
The seven-day bearish streak has dragged the U.S. benchmark to its lowest level since early December after posting an intraday of $57.65 overnight.
At present, the market now awaits for renewed direction as President Donald Trump and Chinese Vice Premier Liu He, are scheduled to ink the so-called “Phase-One” agreement on Wednesday that calls for the U.S. to ease some sanctions on China.
As part of the “Phase-One” deal, the U.S. said it would scrap a new round of tariffs and cutting existing duties on $120 billion in products to 7.5%. However, Trump said 25% tariffs on $250 billion in Chinese products would stay in place.
The U.S. Treasury Department has also agreed to remove China from a list of currency manipulating countries as part of the deal, with reports suggesting that China has pledged to buy nearly an additional $80 billion of U.S. manufactured goods over the next two years.
Meanwhile, the Trump administration has no current plans to lift the more than $US360 billion worth of tariffs it has levied against China since 2018.
WTI crude oil jumped earlier this month as tensions between Iran and the U.S. flared following a U.S. military strike that killed a top Iranian military commander in Iraq. But crude prices gave back gains last week as tensions appeared to ebb following a retaliatory strike by Iran aimed at bases housing U.S. troops in Iraq that produced no casualties.
From a technical standpoint, support is viewed from $57.00-45, which is expected to draw renewed demand if encountered by a bearish challenge.
Viewing the topside, resistance comes in at $60.70-75 with $63.50 firmer above.