The beginning of the new trading week on global commodity markets does not bring a significant change in the quotations of contracts for key raw materials. However, the threat of escalation of the trade war on the China-US line still causes caution on the part of investors.
Oil prices fell on Friday, as US President Donald Trump threatened to impose further tariffs on China, which revived the fear of a trade war between the two countries. Trump announced on Thursday that he recommended officials to consider imposing further tariffs on Chinese goods worth up to 100 billion dollars. Moreover, the US Energy Information Agency (EIA) reported that oil reserves in SUAs dropped 4.6 million barrels last week, while analysts expected their growth to be small. The prices are also theoretically supported by the agreement of OPEC and other producers on limiting the extraction. Saudi Arabia, who is the OPEC leader, assessed that the agreement should be extended in some form. A similar opinion was expressed by the Minister of Oil Qatar.
Let's now take a look at the Crude Oil technical picture at the H4 time frame. The first trading hours of Monday bring a slight increase in the prices of WTI contracts, which slightly correct the strong declines from Friday. Nevertheless, the bulls were not strong enough to break out above the technical resistance at the level of 62.36, despite oversold market conditions and visible bullish divergence between the price and momentum indicator. In a case of a further drop, the next technical support is seen at the level of 61.36.
