WTI Crude Oil at a Standstill - is it Going for Retracement?

WTI Crude Oil at a Standstill – is it Going for Retracement?

Posted Monday, June 1, 2020 by
Arslan Butt • 2 min read

During today’s Asian trading hours, WTI crude oil prices erased some early-day gains from the highest level since March 11 of $36.04 to $35.20 mainly due to the fears of escalating US-China tensions. Additionally, the protests in America and downbeat figures of China’s official Manufacturing PMI boosted uncertainty about recovery which also exerted some downside pressure on crude oil prices.

However, the reason for the earlier gains in crude oil could be attributed to the upbeat sentiment surrounding the Organization of the Petroleum Exporting Countries (OPEC) and its allies, mostly known as OPEC+. At press time, WTI crude oil prices are currently trading at 35.34 and consolidating in the range between 34.77 and 35.89. The OPEC+ will likely meet on June 4 in order to decide on a market management policy that could extend the current production cut pact by up to two months as per the energy intel reports.

At the US-China front, Chinese diplomats failed to cheer the US President Donald Trump’s appreciated move of stepping back from imposing any fresh sanctions on China during Friday’s conference. Despite this, Chinese diplomats showed more fighting spirit which could fuel the ongoing tussle.

In the meantime, tensions between the United States and China were further bolstered by the latest comment of US Secretary of State, Mike Pompeo. The Trump administration official said that the Chinese communist party assumes itself as purpose in the removal of western ideas, western democracies, and western values.

Moreover, the tensions in the US could also be attributed to the Minneapolis protests against the death of George Floyd, with multiple fires set near the White House, which also exerted some bearish pressure on the risk sentiment.

At the China data front, the downbeat figures of China’s Official Manufacturing PMI added to the weakness in the black gold. From the forecast view, China’s Caixin Manufacturing PMI for May came in at 49.6 vs. 49.4.

WTI Crude Oil at a Standstill - is it Going for Retracement?

Daily Support and Resistance

S1 27.86

S2 31.24

S3 33.35

Pivot Point 34.62

R1 36.74

R2 38.01

R3 41.39

Crude oil prices are now trading with a bullish bias holding around 35 area, after having crossed over 34.65 resistance levels. This level is now working as a support for crude oil. On the higher side, WTI prices may find resistance around 36.35 area while the 50 EMA and MACD are still supporting bullish bias. Let’s look for buying trades over 34.65 level today.

Good luck!

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