WTI on the verge of a significant break to the downside

WTI is on the verge of a potential downside continuation.
The demand side case is folding and the markets are concerned about covid again.

Ross J Burland FXStreet

The price of a barrel of oil at the start of the week had taken a considerable knock in the price of WTI, travelling between a high of $77.13 and reaching as low as $74.79 on the day. However, in recent trade, the price established a low and has made tracks to the upside. At the time of writing, the price of oil is now up some 1.45% trading at $76.75.

The price was falling to a seven-week low after Japan said it may release oil from its strategic reserves. Japanese prime minister Fumio Kishida on the weekend said he is ready to cooperate with US requests to release oil from strategic reserves to bring down gasoline prices. At the same time, investors are concerned over the renewed lockdown measures in Europe. Additionally, weaker economic data from China are heightening demand worries.

This is hurting the demand-side argument for higher prices. Then, there were the reports of a coordinated Strategic Petroleum Reserve (SPR) release from the White House in concert with several other countries.

''The Biden administration has asked a wide range of countries, including China, to consider releasing stocks of crude,'' Reuters noted. ''The White House has also repeatedly pressed the OPEC producer group - which plans to meet on Dec. 2 - to maintain adequate global supply.''

Covid contagion risk is back

Meanwhile, analysts at TD Securities are more concerned over the potential for more widespread lockdowns in Europe as a measure to encourage better vaccination rates remains a more potent risk.

''In fact, our analysis suggests that the virus' ability to impact mobility trends has deteriorated over time. In turn, we continue to see a path for energy supply risk to resume its upward trajectory, particularly as global energy markets remain extremely vulnerable to a demand shock this winter,'' the analysts said.

''The rise in European natural gas prices could also see expectations for demand from gas-to-oil-and-fuel-oil switching rise once again, particularly if winter is cold.''

WTI

Overview
Today last price	76.56
Today Daily Change	1.04
Today Daily Change %	1.38
Today daily open	75.52

Trends
Daily SMA20	80.66
Daily SMA50	78.25
Daily SMA100	73.86
Daily SMA200	69.34

Levels
Previous Daily High	79.2
Previous Daily Low	75
Previous Weekly High	80.67
Previous Weekly Low	75
Previous Monthly High	84.98
Previous Monthly Low	74.06
Daily Fibonacci 38.2%	76.6
Daily Fibonacci 61.8%	77.59
Daily Pivot Point S1	73.95
Daily Pivot Point S2	72.38
Daily Pivot Point S3	69.75
Daily Pivot Point R1	78.14
Daily Pivot Point R2	80.77
Daily Pivot Point R3	82.34

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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