U.S. West Texas Intermediate crude oil futures are barely holding on to their marginal weekly gains early Friday as confusion has set in over whether there is a trade deal between the United States and China.
Earlier in the session on Friday, the market hit a three month high in response to the news that the United States and China had reached a “phase one” trade agreement.
Three sources close to the talks told CNBC on Thursday, the Trump administration has reached a phase one trade deal with China in principle, pending approval from President Donald Trump.
Crude oil prices retreated from its weekly high as investors digested mixed news around U.S.-China trade relations after President Trump tweeted a Wall Street Journal report on the U.S.-China trade deal is “completely wrong.”
That appears to the story driving the price behavior at the end of the week, and it could determine whether the market closes higher or lower for the week. Depending on the circumstances, this event could influence the longer-term direction of the market.
China Press Conference Could Be Key Influence on Prices
China has scheduled a press conference for early Friday (stateside) that could also dictate this week’s close and next week’s direction. Basically, “trade deal on” is likely to underpin prices, and “trade deal off” is likely to encourage profit-taking and position-squaring.