WTI drops to fresh lows near $39.70 ahead of API

Prices of the WTI leave the area above the $40.00 mark.
The $39.70 region offers initial support for the time being.
The API will release its weekly report on US inventories later on Tuesday.

Pablo Piovano FXStreet

Prices of the American benchmark for the sweet light crude oil broke below the $40.00 mark per barrel and slipped back to the $39.70 region on Tuesday.

WTI focus on pandemic, crude supplies

Prices of the barrel of the West Texas Intermediate now edge lower and trespass the $40.00 mark in response to heightened concerns over the coronavirus pandemic and the impact on the oil industry.

Further out, crude oil prices are seen extending the multi-session consolidative range with gains so far limited by the $41.50 zone (September 18 peaks) while the 100-day SMA, today at $39.14, continues to hold the downside.

Somewhat limiting the downside in prices, however, emerge the current offered stance in the dollar coupled with a potential strike in the Norwegian oil industry, which could involve around 900K bpd.

Later on Tuesday, the API will publish its weekly report on crude oil inventories ahead of Wednesday’s EIA report and Friday’s oil rig count by driller Baker Hughes.

WTI significant levels

At the moment the barrel of WTI is losing 1.69% at $39.85 and a breakdown of $38.67 (weekly low Sep.21) would aim for $36.15 (monthly low Sep.8) and then $31.16 (low May 28). On the other direction, the next up barrier is located at $41.46 (weekly high Sep.18) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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