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WTI Crude futures are currently trading at $52.02-lower by 2.76% as compared to the previous closing. Oil prices fell today after U.S. companies added rigs for the first time this year, a signal that crude output may rise further. Crude price, however, is still on course for its strongest gain in the month of January for 14 years.
Brent crude futures were trading at $60.17-lower by 2.22% as compared to the previous closing.
Further weighing on oil markets, the trade tensions between the US and China looks unlikely to end anytime soon and its impact on China’s economy is increasing.
Energy services firm Baker Hughes said in its weekly report on Friday that the U.S. energy firms last week increased the number of rigs looking for new oil for the first time since late December to 862.
Even with all the uncertainty over the outlook for demand and evidence of growing supply, the oil market has benefited this month from the start of another round of production cuts by the OPEC and its partners, as well as robust trade in physical barrels of crude led by China.
The commodity price has risen by 12% so far in January, the largest increase in percentage terms in the first month of the year since 2005.
Traders have added to their bets on a sustained rise in the oil price this month for the first time since September, according to data from the InterContinental Exchange. But much of the demand outlook hinges on China and whether or not its refiners will continue to import crude at 2018’s breakneck pace.
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 25th January on Tuesday. Previously, the API reported that U.S. crude supplies rose by 6.550 million barrels for the week ended January 18. The EIA will report US crude inventories for the week ended 25th January on Wednesday. Previously, the EIA reported that U.S. crude inventories rose by 7.970 million barrels for the week ended January 18.
On the technical front, the RSI is currently at 52.53% and suggests that the market can move in the downward direction. The current price is below the MA5 (52.94). The current price is below the middle line of the Bollinger Bands and is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Stop Sell At 51.95 Take Profit At 51.25 Stop Loss At 52.30