WTI gains capped below $ 62.50, China-US trade angst weighs
- Steady DXY, bearish drilling report and China-US trade spat cap the upside.
- A break below $ 62 should trigger a sharp sell-off towards $ 61.50.
WTI (oil futures on NYMEX) is seen extending its side trend into mid-Europe, as the bulls consolidate the overnight rebound to near $ 62.50 levels.
Despite the positive bias, oil prices remain on the back foot, as markets keep an eye on the China-US trade war issue and the situation in Syria. Reuters reported that the air strikes were carried out overnight in Syria, killing at least 14 people.
Moreover, bearish US drilling sector activity report published on Friday also keeps a lid on the prices. The US drillers added 11 rigs looking for new production in the week to April 6, bringing the total count to 808, the highest level since March 2015, the data released by Bakers & Hughes oilfield Services Company showed.
Elsewhere, the Organization of the Petroleum Exporting Countries’ (OPEC) number two producer Iraq said on Monday that it is keeping prices for its crude supplies in May steady. Looking ahead, all eyes remain on the development surrounding the China-US trade tensions as well as on the US weekly crude supplies report for fresh momentum on the black gold.
WTI Technicals
The research team at BBH noted: “It closed at its lowest level since March 19, a below the $62 support, which is also where a trendline off the mid-February and mid-March highs was found. The technical indicators are trending lower. The next support is seen near $60. A break of $58 would warn of risk toward $50.”