U.S. Crude Flirts With $59

U.S. crude has posted gains in the Thursday session. Currently, crude is trading at $58.90, up $0.30 or 0.52%. Brent crude is trading at $65.25, down $0.34 or 0.53%.

EIA Inventory Draw Lifts Crude

The EIA (Energy Administration Information) crude inventories report has indicated mostly declines in recent weeks, and this was the case again on Wednesday, as inventories fell by 2.5 million barrels last week. Analysts had expected a small gain of 0.5 million, and crude prices have responded with gains on Thursday.

Will ‘Phase One’ Deal Lift Oil Prices?

The U.S. and China signed the Phase One trade agreement on Thursday at the White House. The accord marks a breakthrough in the bitter trade war, but is limited in scope and leaves many U.S. tariffs in place against China. The countries are the two largest consumers of oil in the world, so the fact that the U.S.-China trade relationship has improved should help both economies and lead to greater demand and higher prices for oil.

Holidays Lift Retail Sales

Retail sales, the primary gauge of consumer spending, were positive in December. The headline reading improved to 0.3%, up from 0.2% a month earlier. Core retail sales impressed with a gain of 0.7%, above the estimate of 0.5%. The strong numbers were a result of a late-holiday shopping spree by consumers. Still, 2019 saw moderate consumer spending, and inflation levels remain low, as seen in the December CPI release, which dipped to 0.3%, down from 0.2%.

Technical Analysis

The line of 58.75 is fluid on Friday, after gains by crude. The 50-EMA line is close by, at 58.98. Above there is resistance at the round number of 60.00. On the downside, there is support at 58.00. This is followed by a support level at 57.25, which has held since December 3.

WTI/USD 1-Day Chart