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WTI Crude futures are currently trading at $51.27-lower by 0.54% as compared to the previous closing. Crude prices dropped today after data reported weakening imports and exports in China, the world’s second-largest oil consumer, raising the prospect of a slowdown in fuel demand.
Brent crude futures were trading at $59.92-lower by 1.05% as compared to the previous closing.
Despite concern about the outlook, there is little sign that China’s oil demand has weakened yet. China’s crude imports in December rose around 30% from a year earlier, according to Reuters data.
Crude Oil is drawing support from supply cuts led by the OPEC and non-OPEC allies, including Russia. The group of producers agreed in December to cut oil output by 1.2M barrels per day beginning in January to prevent a supply glut and boost prices.
With the rise in Brent Crude from a dip below $50 per barrel in December, OPEC officials appear more confident that prices will be supported by output declines in January as producers implement the deal.
Meanwhile, Saudi Energy Minister Khalid al-Falih said on Sunday that the oil market was “on the right track” and there was no need for an extraordinary OPEC meeting before its next planned gathering.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 11th January on Tuesday. Previously, the API reported that U.S. crude supplies fell by 6.27 million barrels for the week ended January 4. The EIA will report US crude inventories for the week ended 11th January on Wednesday. Previously, the EIA reported that U.S. crude inventories fell by 1.680 million barrels for the week ended January 4.
On the technical front, the RSI is currently at 57.43% and suggests that the market can continue trading sideways. The current price is below the MA5 (51.54). The current price is above the middle line of the Bollinger Bands but is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 51.50 Take Profit At 50.80 Stop Loss At 51.80