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- WTI pulls back as trade tension, mixed political headlines supersede API data.
- China PMI, the outcome from Shanghai talks and EIA numbers will be the key to watch.
With the trade/political headlines flashing mixed signals and the API data registering another draw, WTI declines to $58.25 amid initial Asian trading on Wednesday.
While the US President Donald Trump doesn’t refrain from pouring cold water on expectations of a breakthrough from Shanghai’s trade talks, which Chinese media hates, the Trump administration’s extension to Iran sanction waiver, as per the Washington Post, signals receding tension between the US and Iran and also adds downside pressure on the energy benchmark.
Positives to the price momentum, which are largely being ignored, initially arrived from the American Petroleum Institute’s (API) US oil inventory data and North Korea’s another short-range missile test.
The API registered another decline in the US oil stockpile, worth of 6.024 million barrels versus previous -10.961 million barrels, for the week ended on July 26. On the other hand, North Korea test-fired two short-range missiles, marking the second such instance in almost the week’s time. Though, the White House says it knew about the test that doesn’t threaten the US.
Moving on, China’s activity index numbers and developments surrounding the US-China trade talks during the final day can entertain intra-day traders ahead of the Energy Information Administration (EIA) report.
Technical Analysis
July 24 high close to $57.60 acts as immediate support for the energy benchmark ahead of 200-day moving average (MA) level of $57.00. Meanwhile, an upside clearance of June 27 low around $57.60 can trigger the black gold’s rise towards 100-day MA level of $59.00.