WTI continues to erase OPEC-inspired gains, inches closer to $58
- OPEC+ announced decision to deepen output cuts by 500,000 barrels per day.
- WTI rose to its highest level since mid-September near $60 last Friday.
- Dismal Chinese data and the trade uncertainty weighs on crude oil prices on Monday.
Crude oil prices gained traction on Friday after the OPEC and its allies (OPEC+) announced decision to deepen supply curbs by 500,000 barrels per day (bpd) to 1.7 million bpd until March 2020. The barrel of West Texas Intermediate (WTI) climbed to its highest level since September 16 at $59.80 but struggled to extend the rally on Monday. As of writing, the WTI is trading at $58.40, losing more than 1% on a daily basis.
Focus shifts to US-China trade talks
The uncertainty surrounding the US-China trade talks seems to be forcing investors to move to the sidelines. If sides fail to reach a deal and the US ends up hiking tariffs on Chinese imports on December 15th as planned, markets could start pricing a lower energy demand from China, the world's second-largest oil consumer, and cause crude oil prices to come under renewed selling pressure.
Furthermore, the data published by China's General Administration of Customs on Sunday showed that exports in November declined by 1.1% annually to reveal the negative impact of the trade war.
In the meantime, Libya National Oil Corp (NOC) declared force majeure on loadings of Mellitah crude oil after the 73,000 bpd El Feel oilfield shut down last Thursday, Reuters reported on Monday, citing six industry resources. Nevertheless, this development failed to help crude oil stage a recovery.
Technical levels to watch for