WTI loses 1.0% in Asia amid broad risk-off mood
|- WTI registers multiple failures to cross $38.00, prints three-day losing streak.
- Trade war, fears of the coronavirus wave 2.0 join downbeat EIA inventories to disappoint energy buyers.
- Iran, Venezuela stay firm in countering US sanctions.
WTI stays depressed near $37.80, down 1.0%, while heading into the European open on Thursday. The black gold recently portrayed another attempt to cross $38.00 but failed, as it has been since the early morning in Asia. In doing so, the bears seem to cheer three back-to-back days of losses.
The energy benchmark has recently been weighed down by the growing concerns over the coronavirus (COVID-19) second wave emanating from the US. Also disappointing the buyers could be trade tensions emanated from America. Further, downbeat weekly inventory details from Energy Information Administration (EIA) also favor the sellers. As per the latest data for the week ending June 19th, Commercial crude oil inventories in the United States increased by 1.4 million barrels versus the last week's increase of 1.2 million barrels.
Amid all these risk-negative catalysts, stocks in Asia and the US 10-year treasury yields dropped in recent hours. The same raises the bar for the commodity traders.
While taking clues from the risk-off mood, oil prices seem to ignore Iran’s open rejection to respect the US sanction, as per the Iranian spokesman’s tweet. Additionally, the global oil producers’ output cut and recently recovered PMI data are some other factors that have lost their importance off-late.
Looking forward, updates concerning the coronavirus (COVID-19) and Trump administration’s trade tactics will be the key to watch for immediate direction. Also important will be the US Durable Goods Orders and Weekly Jobless Claims.
Technical analysis
Although 21-day SMA near $31.75 restricts the quote’s immediate downside, buyers are less likely to enter unless witnessing a daily break above the weekly top of $41.65. As a result, an upward sloping trend line from May 28, at $36.75 now, remains on the sellers’ radar.
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