U.S. West Texas Intermediate crude oil futures are in a position to finish the week nearly 5 percent higher although on a weak note due to selling pressure on Friday. On the last day of the month and week, prices are trading sharply lower as concerns over an escalating trade dispute between the United States and China dampen investor sentiment.
Losses could be limited by concerns over impending U.S. sanctions against Iran and falling Venezuelan output, which threaten supply.
Overbought conditions could also be driving the price action ahead of the long U.S. holiday week-end. It’s been 12 daily sessions since the last major bottom so the markets may be due for a near-term correction. Traders could also be using the mounting trade concerns as an excuse to book profits after a prolonged rally.
The primary stories at the end of the week deal with trade issues. U.S. President Donald Trump threatened in an interview with Bloomberg News on Thursday to withdraw from the World Trade Organization, his latest salvo in a deepening dispute between the United States and its major trading partners.
Additionally, Trump is prepared to ramp up a dispute with China and has told aides he is ready to impose tariffs on $200 billion more Chinese imports as early as next week, Bloomberg reported on Thursday.
In a nutshell, crude oil prices were primarily supported this week by expected supply issues with Iran and Venezuela, and strong momentum…