Crude oil prices ease on Chinese lunar new year

Feb. 5 (UPI) -- Crude oil prices eased after recent gains as traders awaited trade talks progress, in low volume trading due to the Chinese new year.

As of 9:05 a.m. EST West Texas Intermediate front-month crude oil prices were 0.7 percent lower to $54.17 per barrel, while Brent crude futures traded 0.6 percent lower at $62.14 per barrel.

"Traders are reluctant to take a major position ahead of State of the Union speech by U.S.President Donald Trump because he may address U.S.-China trade relations," James Hyerczyk, analyst at FXEmpire, told UPI.

In addition, low liquidity due to the Lunar New Year Holiday is also having an influence. "China is shut down for a week so there will be no progress on trade talks," Hyerczyk added.

Martin Essex, a Daily FX analyst, separately told UPI that today's price "has eased back as much of the news about supplies and Venezuela is already in the price."

WTI prices have declined from closing at $55.26 per barrel on Friday, its highest level for the year, since starting 2019 at levels just over $45 per barrel.

"Energy markets were down given the more sanguine tone in the macro markets, a mark down in risk premium," independent analyst Lakshan De Silva told UPI.

Looking ahead, "however, supplies will remain tight and that will likely lead to further upward pressure on prices in the weeks ahead," DailyFX's Essex added.

He said earlier he expected that "support from the lower trendline around $53.65 per barrel should limit any near-term falls."

WTI saw $76-per-barrel levels on Oct. 3, before declining sharply on a variety of factors.

Rising oil production in the United States, the Nov. 5 announcement of temporary waivers to nations to avoid Iran-related sanctions, as well as slowing demand concerns, and worries about a slowing economy in China, have kept pressure on prices.