- WTI yields into broad risk-aversion, as virus concern return
- Dollar comeback also collaborates with the downside.
- All eyes on the API data, as the bears take a breather.
WTI (August futures on Nymex) is off the lows but struggles to extend the bounce above the 40 level amid persisting risk-off trading in the mid-European session.
The bears appear to take a breather, awaiting fresh cues from the sentiment on Wall Street, US coronavirus stats and American Petroleum Institute’s (API) weekly crude inventories data. At the press time, the US oil trades -1.33% at 40.10, having failed minor recovery attempts near 40.50 levels.
The sentiment around the higher-yielding oil remains undermined by dampened market mood, as the spike in coronavirus new cases in the US and Australia has led to regional lockdowns. The partial lockdowns will likely curb the expectations of a quick economic recovery and its resultant impact on the demand for oil and its products.
Further, broad-based US dollar strength amid risk aversion combined with ongoing tensions between China and the other countries over the Hong Kong issue also affects the risk play. Meanwhile, markets also watch out for any negative impact of the oil production restart the Wafra oilfield last week.
WTI technical levels to watch
“Should there be a clear downside below $39.40, June 24 top near $38.60 and June 24 low near $37.60 might offer intermediate halts before dragging oil prices to the previous month’s bottom close to $34.50/45. Meanwhile, the mentioned bearish formation’s upper line around $41.15 can offer immediate resistance ahead of June month’s top near $41.65. It should, however, be noted that the bulls’ ability to cross $41.65 enables them to challenge February month low around $44.00,” FXStreet’s Analyst Anil Panchal noted.
WTI additional levels
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