WTI: Sell-off resumes, September low of $36.13 at risk
- WTI extends the rout on coronavirus lockdowns in the EU.
- Rising US crude supplies intensify supply glut worries.
- US Q3 GDP and virus data to dominate the market sentiment.
Following a brief consolidative stint, WTI (futures on NYMEX) resumes its sell-off in the European session, closing in on the September low of $36.13.
The black gold extends Wednesday’s 5% slide, now shedding about 3% to trade at $36.45. A breach of September lows will expose the bears to the weakest levels since June this year.
The WTI barrel continues to face a double whammy on both the demand and supply fronts. New coronavirus-induced lockdowns in Germany and France put the global economic rebound at risk while weighing on oil, in the wake of dwindling demand for oil and its products.
Meanwhile, growing supply glut worries amid rising US crude stockpiles and resumption of the Libyan oil output continue to dampen the sentiment around the US oil. The Energy Information Administration (EIA) reported that the US crude stockpiles rose by 4.3 million barrels in the week to Oct. 23, a bigger increase than expected, per Reuters.
Looking ahead, the broader market sentiment and the virus data will continue to have a significant impact on the US dollar-denominated oil, as the dollar bulls regain control amid the return of risk-off flows.
WTI technical levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
