WTI stuck in range around $ 58 despite trade optimism
- Oil consolidates Friday’s surge to two-month highs.
- The bulls are divided between broad USD strength and trade optimism.
- Focus is shifting towards the Dec OPEC+ meeting amid impending trade talks.
WTI (oil futures on NYMEX) posts small gains near $ 58 mark in the European session this Monday, lacking a clear directional bias despite improved risk appetite on fresh US-China trade optimism.
However, the sentiment around the black gold remains somewhat underpinned by the fresh hopes of a US-China trade deal following the recent upbeat comments from the US and China while Beijing’s gesture to raise the penalties on the Intellectual Properties (IP) theft also rekindled expectations of a trade truce.
The gains in the barrel of WTI remains capped mainly due to broad-based US dollar strength, driven by the rise in the US Treasury yields amid a risk-on market profile. The US dollar index bounces back to test the weekly tops of 98.30, modestly flat on the day. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.
Meanwhile, the bulls were also left unimpressed by the latest CME OPEC Watch Tool that showed that the OPEC+ is likely to leave the output cut policy unchanged when it meets in Vienna on Dec, 5. CME OPEC Watch Tool: Probability of OPEC+ maintaining output cuts stands at 81.51%
Markets now await the US weekly crude supply reports and fresh developments on the US-China trade front to gauge the next direction in the commodity.
WTI Levels to watch