Overnight, US has hiked tariffs on $200 billion of Chinese goods to 25% from 10%, escalating the trade war between the two world’s largest economies. At the same time, the negotiations are set to continue today and investors still hope to see a breakthrough in relations.
Besides, the oil market is awaiting a fresh weekly report from Baker Hughes . Last week, the number of active rigs drilling for oil rose by 2 to 807 following a drop of 20 oil rigs in the previous week. Further recovery in the rigs could cap the upside potential in prices in the short term.
Technically, Brent needs to see a sustainable break above $71, which is necessary for some improvement in the near-term outlook. On the other hand, as long as prices stay above the 200-DMA around $69, the selling pressure is limited.