Petroleum registers its best session in three months

Key oil price points:

• The price of oil explodes and registers an advance of more than 4%.
• This price action takes place after a relative risk reduction and favorable news from China.
• From a technical point of view, the WTI continues to push the resistance of the descending triangle.

OIL PRICE ANALYSIS

The price of oil comes happily to the navel of the week. This happiness takes place after the main hydrocarbon registered its greatest advances since June. Accountingly, the US WTI mix is ​​amassing profits of more than 4%.

From the causal point of view, oil has favorably received a decrease in global risk aversion and relevant news to China.

In the first instance, as we discussed this morning, markets have reduced their need for precautions after two of the relevant political conflicts showed a better face.

Additionally, and in a more relevant way to the main energy company, comments have emerged that China is in talks with Iran to establish a new partnership for energy supply. Therefore, this has given some relief in terms of the energy demand side of the Asian giant.

Oil has rebounded. How will WTI end 3Q of 2019? Find out here with the trading guides by the DailyFX team.

Looking ahead, the focus will be on aspects relevant to the state of the US economy. In this case, after the strong contraction that the manufacturing sector registered yesterday, investors will now be attentive to how the labor market developed during the month of August. It is worth mentioning that this has been showing a clear slowdown over the past 12 months and a considerably unfavorable note, could restore global risk aversion under the premise of an economic decline.

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TECHNICAL ANALYSIS PRICE OF OIL

WTI daily chart:

From a technical point of view, the WTI is pushing the resistance limits of the descending triangle once more.

In this case, as we can see, each push, which has failed to register a new max. at a higher level a state displacing the resistance.

This event causes the perspective to be somewhat complicated for the WTI and until a new max. the profile will be maintained in an eventual search for support within the triangular formation (red area).

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Written by Quasar Elizundia – Market Analyst

Follow me in @QuasarElizundia