WTI edges higher as dollar weakness overshadows Sino-US tussle
- WTI ekes out moderate gains as dollar slips to 22-month lows.
- Escalating U.S.-China tension, dismal US data could cap gains.
West Texas Intermediate (WTI), the North American oil benchmark, is trading in the green at press time with the US dollar hovering at 22-month lows.
At press time, WTI is trading at $41.21 per barrel, representing a 0.34% gain on the day, having put in a high of $41.35 a few minutes before press time.
The dollar index, which tracks the value of the greenback against majors, fell to 94.57 early Friday, the lowest level since September 2018. A weak dollar makes commodities like oil look cheaper and spurs buying.
That said, WTI may have a tough time rising all the way to Thursday's high of $42.36 due to escalating US-China tensions. Washington ordered China to close its consulate in Houston earlier this week, marking an unprecedented escalation with the dragon nation. Beijing has vowed to retaliate and may announce something later on Friday.
In addition, Thursday's dismal weekly jobless claims data has revived concerns regarding the health of the world's largest economy.
Looking forward
According to Barclays Commodities Research, oil could see a correction in the near term if a recovery in fuel demand slows further, especially in the United States.
Meanwhile, Thursday's bearish outside day candle suggests a price pullback is overdue.
Technical levels