WTI fades upside momentum below $43.00 despite fears of storms
|- WTI eases from $42.76, still snaps two-day losing streak.
- 57.6% Gulf of Mexico oil production was down due to storms Laura and Macro.
- Iraq’s Oil Minister suggests further production at home.
Despite recently declining from the intraday top of $42.76 to currently around $42.51, WTI prints 0.50% intraday gains ahead of Tokyo open on Monday. The energy benchmark began the week with an uptick from $42.30 towards making the day’s high amid the initial hour of trading.
While the US dollar’s strength and the coronavirus (COVID-19) fears could be cited as negatives, storms marching towards the Gulf of Mexico are the latest positives for the black gold.
Reuters came out with the news during the weekend suggesting that Producers halted 240,785 barrels per day of oil production and 119 million cubic feet per day of natural gas output before noon on Saturday, said regulator U.S. Bureau of Safety and Environmental Enforcement. Crews were evacuated from six production and four drilling rigs. Another seven drilling vessels were moved out of the storms' paths.
Elsewhere, Iraqi Oil Minister Jabbar Alluaibi crossed wires, via Reuters, while saying that the country produces 5 million barrels per day (bpd) and the production could ramp up to 7 million bpd by 2025. The news follows the downbeat demand forecasts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group is known as OPEC+.
It should be noted that the US dollar’s bounce off 27-month low and the market’s rush towards equities join downbeat energy demand expectations due to the virus to weigh on the commodity prices. That said, S&P 500 Futures rise 0.22% to 3,400 by the press time.
Considering the lack of any oil-specific data, market players will keep eyes on the storms headlines and the US Chicago Fed National Activity Index, prior 4.11, for fresh impetus.
Technical analysis
Although an ascending trend line from the mid-June, currently around $41.50, restricts the quote’s short-term downside, buyers are less likely to have a bumpy road unless breaking the monthly high near $43.65.
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