Crude oil price continued the upward climb as a deal between China and the United States appeared close.
March 4, OctaFX – On Friday, a report by Bloomberg said that the two countries were preparing the wording of a final report, which could be signed within weeks. A report by WSJ said that a deal was not far on the horizon, with China offering more US purchases with the goal of reducing the deficit and the US offering to get rid of tariffs on Chinese goods.
Investors believe that a trade deal would help increase the demand for crude oil. However, both articles warn that Trump could change his mind at any time. In addition, production in the US appeared to be weakening. Last week, the API and EIA inventory data showed increased drawdowns. On Friday, data from Baker Hughes showed that oil rigs had declined from 853 to 843.
Crude oil price analysis
Last week, crude oil price fell sharply after Trump asked OPEC to intervene. After that, the price started to increase and by Friday, it had pared the previous losses. On Friday, the price declined sharply as traders took profits.
Today, the price has moved higher as signs of a trade deal emerge and as US production reduces. The XBRUSD pair is currently at 65.30, which is higher than the low of 64.47. This price is slightly above the lower band of the Bollinger Bands while the signal line of the stochastics indicator is moving up. The pair will likely continue with the upward trend.
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