WTI trims gains amid US-China trade progress, focus shifts to US data

• Oil little impressed by US-China trade progress, as rising US output and firmer USD weigh.
• But OPEC cuts, partial Saudi field outage and Venezuela sanctions to limit the downside.
• Focus on US industrial production, consumer sentiment and rigs count data for fresh directives.

Oil prices on both sides of Atlantic pause their three-day winning streak and pared gains on Friday, as inconclusive US-China trade talks amid some progress failed to lift the sentiment around the risk assets such as oil. Meanwhile, a broad-based US dollar recovery after yesterday’s bad US retail sales data-led sell-off also collaborated to the latest downside.

However, the buoyant tone around the black gold remains somewhat intact amid increased expectations that the OPEC output cuts will get deeper and lead to tightening global supplies going forward while the partial closure of Saudi Arabia’s Safaniyah, its biggest offshore oil field, also helped keep the downside cushioned.

More so, the US sanctions on Venezuela continue to threaten the Venezuelan oil exports and heighten supply disruption risks, further supporting the bullish sentiment around oil prices.

Looking ahead, attention now turns towards a fresh host of fundamental news due out of the US later on Friday, including the industrial output, UoM consumer sentiment and rigs count data, all of which are likely to have a major bearing on the US oil, WTI.

At the press time, WTI trades +0.24% higher near 54.50 levels while Brent advances +0.40% to hover just below the 65 barrier. Note that Brent oil hit fresh 2019 highs at 65.10 in early Asian trading.

WTI Technical Levels