WTI Crude Oil Recovered to $25.85 Amid Weaker Dollar – Eyes On US Nonfarm Payrolls

Posted Friday, May 8, 2020 by
Arslan Butt • 2 min read

WTI crude oil prices erased their previous session losses and rose to near $23.85, representing a 1.23% gain on the day mainly due to risk-on market sentiment in the wake of the latest optimism between the United States and China trade war. Saudi Arabia raised its official selling prices overnight, which keeps oil prices higher. WTI crude oil prices are currently trading at 24.62 and consolidating in the range between 23.26 and 24.98.

WTI crude oil prices got a boost from the improvement in the risk sentiment, but prices are still trading well below Thursday’s high of $26.74. The black gold was bullish more than 10% during Thursday’s European trading hours, mainly due to the Saudi’s decision to raise the June price for its Arab Light crude oil to Asia by $1.40 a barrel from May.

The reason behind the risk-on market sentiment is the update from China’s Xinhua that the US and China agreed to continue further communication and cooperation ahead. The updates from the US Trade Representative (USTR) Office also boosted the previous risk-on sentiment.

The USTR issued a statement that the Chinese Vice Premier Liu He, US Treasury Secretary Steven Mnuchin, and Trade Representative Robert Lighthizer also participated in a conference call and discussed economic and trade concerns, including the phase one deal. On the other hand, most of the investors are guardedly hopeful due to easing lockdown measures in the US, which is eventually helping oil demand to increase slowly.

WTI Crude Oil – Technical Outlook
Support Resistance
22.08 25.88
20.61 28.21
18.28 29.68
Pivot Point 24.41

US oil is facing strong resistance around 27.32, which is extended by a downward trendline on the daily chart, and now 24.01 level is extending double bottom support to US Oil. The breakout may determine the next movement, as a violation of 24 can lead US oil prices towards 61.8% Fibonacci retracement at 22.63. Conversely, a bullish breakout of 27 can lead oil prices towards the next resistance level of 30.60.

Good luck!

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