WTI crude oil prices failed to extend their three-day winning streak and dropped to $35.60 level after stepping back from $35.90 on the day due to the intensifying US-China tensions. Additionally, the reason for the declines in crude oil prices could also be attributed to the protests against the alleged killing of Minnesota’s George Floyd.

WTI crude oil prices are currently trading at 35.67 and consolidating in the range between 35.30 and 35.76. However, the market participants are waiting to see whether major crude producers agreed to extend their large production cuts to support prices in a meeting expected later this week.

The reason for the intensifying tension between the United States and China could be associated with the Chinese government’s decision to stop the purchases of American soybeans and other US agricultural goods. The Chinese buyers also canceled some US pork orders, which eventually fueled the long-lasting tussle between the US and China.

US President Donald Trump did not impose any sanctions on China over the Hong Kong security issue during his press conference last Friday even after China did not show any sign of decreasing the conflict, which had previously exerted some downside pressure on the energy benchmark and contributed to the oil declines.

On the other hand, the declines in crude oil prices were further bolstered by the ongoing drama near the White House. Many protesters occupied the White House area against the alleged killing of George Floyd. As a result, Trump showed a willingness to use all the possible ways like “military or social” to take the situation under control.

Daily Support and Resistance

S1 32.44

S2 33.9

S3 34.81

Pivot Point 35.36

R1 36.27

R2 36.81

R3 38.27

US Oil prices are trading with a bullish bias around 36, and bullish breakout of this level can help us capture buying until 36.35 while support holds around 35. On the lower side, the support holds at 34.65, while the 50 EMA also supports a bullish bias. Let’s look for buying trades upon the bullish breakout of 35.75 to 36.35.

Good luck!