WTI hangs near multi-week low, seems vulnerable below mid-$75.00s
|- WTI is seen consolidating its recent downfall to the lowest level since July 20 touched on Wednesday.
- Easing worries about supply disruptions in the Middle East and demand concerns continue to weigh.
- The fundamental backdrop supports prospects for an extension of a three-week-old descending trend.
West Texas Intermediate (WTI) Crude Oil prices struggle to register any meaningful recovery on Thursday and remain on the defensive for the third straight day. The commodity currently trades around the $75.45 area, down nearly 0.15% for the day and just above its lowest level since July 20 touched on Wednesday.
Easing worries about the potential supply disruptions from the Middle East, led by the Israel-Hamas conflict, and concerns over waning demand in the US and China – the world's top consumers – continue to weigh on Oil prices. In fact, a report by the American Petroleum Institute (API) suggested that US crude inventories increased by 11.9 million barrels over the week to November 3. If confirmed, this would mark the biggest weekly build since February and point to a weakening demand.
Meanwhile, data released earlier this week showed that China's crude imports in October were robust, though the worsening economic outlook is expected to dent fuel demand. The fears resurfaced after the latest inflation figures from China indicated sustained deflationary pressures in the wake of weak discretionary spending and business activity. This comes on top of reports that Russia’s oil exports hit a near four-month high in the prior month, which eased worries about tight global supplies.
The aforementioned fundamental backdrop seems tilted in favour of bearish traders and suggests that the path of least resistance for Crude Oil prices is to the downside. That said, oscillators on the daily chart are on the verge of falling into oversold territory. This makes it prudent to wait for some near-term consolidation or a modest bounce before bearish traders start positioning for an extension of the recent well-established downward trajectory witnessed over the past three weeks or so.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.