- Weaker amid North Korea reports, renewed US-China trade worries.
- All eyes on US-China trade talks for fresh direction.
WTI (futures on Comex) is seen struggling to extend the recovery above the 62 handle, having reversed a sharp drop to 61.35 levels after a fresh risk-aversion wave gripped the European markets on the Yonhap report that North Korea fired unknown projectiles.
The North Korean headlines added further to the soured sentiment, fuelled by the ongoing US-China trade spat and knocked-off the higher-yielding oil to daily lows.
Over the last hours, the black gold is seen making minor recovery attempts, but upside appears to lack follow through, as markets refrain to place any big bets on the barrel of WTI heading into the crucial 2-day trade talks between the US and China that commences later today.
The oil bulls manage to find some support from the ongoing rift between the US and Iran, with the US having imposed fresh sanctions on the Iranian metal industry a day before. Also, with the EU rejecting Iran’s ultimatums on the nuclear programme, the buyers continue to lurk at lower levels.
Further, the bullish EIA crude inventory report also somewhat remains oil-supportive. The latest US EIA data showed an unexpected drop in the US crude inventories by 4 million barrels in the week to May 3rd.
Looking ahead, all eyes remain on the US-China trade developments, with the US tariff hike looming this Friday, which may influence the risk trend and eventually impact the risk asset, oil.
WTI Technical Levels