WTI consolidates the drop around $ 57 amid trade deal hopes

• Oil fails to hold the upside above 200-DMA, but stays above 5, 100-DMA.
• US-China trade deal progress outweighs large US crude inventory build.
• Focus remains on trade updates ahead of US Rigs Count data.

WTI (oil futures on NYMEX) is seen wavering around the 57 handle amid thin liquidity in the Asian opening hours while markets absorb the latest US-China trade developments.

At the press time, the prices consolidate the overnight drop to 56.85 support area, as the bulls face rejection once again above the 200-day Simple Moving Average (DMA) now at 57.33 while the rates stay above the 100-DMA for the fifth straight session on Friday.

The black gold rallied near 1.50% on Thursday after the US confirmed that it would roll back existing tariffs on Chinese goods. The positive development boosted hopes that a trade deal between the US and China was closer and in turn eased global oil demand growth concerns.

Meanwhile, the OPEC Secretary-General Mohammad Barkindo’s optimistic outlook on the oil market also continues to keep the buoyant tone intact around oil.  Barkindo said that the oil market outlook for 2020 may be brighter than previously forecast, downplaying any need for deeper production cuts.

However, the barrel of WTI struggles to extend the upside, as bigger-than-expected build in the US crude stockpiles weighs on the prices. Looking ahead, the broad market sentiment will have a major influence on the commodity amid fresh trade headlines and ahead of the US Consumer Sentiment and Baker Hughes US Oil Rigs Count data.

WTI Levels to watch