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WTI Crude futures are currently trading at $51.57-lower by 2.14% as compared to the previous closing. The contract price was also weighed down by the closure of the second largest crude distillation unit at Phillips 66’s Wood River, Illinois, refinery following a fire on Sunday.
Crude prices fell today as an uptick in U.S. drilling and concerns about demand due to the slow progress in U.S.-China trade talks overshadowed support from OPEC-led supply restraint.
Brent crude futures were trading at $61.42-lower by 1.06% as compared to the previous closing.
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 second time in three weeks, pointing to a further rise in U.S. crude production.
A new round of trade talks began in Beijing today with higher-level talks involving U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday and Friday. The U.S. has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not produce an agreement.
Prices have been buoyed, however, by output curbs from the OPEC and its allies, including Russia. The deal went into effect from January, aims to cut 1.2M bpd until the end of June to forestall an overhang, in a move producers and many analysts expect to soon help balance supply and demand.
Suhail Al Mazrouei, the Energy Minister of the UAE, said today the oil market should achieve this balance in the first quarter of 2019.
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 8th February on Tuesday. Previously, the API reported that U.S. crude supplies rose by 2.514 million barrels for the week ended February 1. The EIA will report US crude inventories for the week ended 8th February on Wednesday. Previously, the EIA reported that U.S. crude inventories rose by 1.263 million barrels for the week ended February 1.
On the technical front, the RSI is currently at 44.18% and suggests that the market can move in a downward direction. The current price is below the MA5. 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-Limit Sell At 51.85 Take Profit At 51.15 Stop Loss At 52.20