WTI slumps -3% in Asia, breaches $ 44 mark

Dhwani Mehta FXStreet

Oil futures on NYMEX prolongs its downward trajectory for the fifth straight session on Friday, having witnessed aggressive selling pressure over the last hour, which knocked-off the commodity to the lowest levels since Nov 2016 below $ 44 mark.

Oil prices dived deeper into the red territory and extended its overnight sell-off into Asia, as markets fret over the upcoming weekly US drilling data, which may show yet another addition in the rigs and hence, could aggravate ongoing supply glut concerns.

Last week, the US drillers added rigs for the 15th week in a row, data from oilfields services company Baker Hughes showed last Friday.

Oystein Berentsen, managing director for oil trading company Strong Petroleum in Singapore, as cited by Reuters, noted: "This collapse seems to be due to stops being hit. However I feel it is a bit strange so close to OPEC ... meeting where a roll over seems likely."

Moreover, recent downfall in the US dollar also failed to provide any support to the black gold, as concerns over rising US production and record-high storage levels continue to dent the sentiment around the oil markets.

Alongside, the weekly US rigs data, the NFP report will be also closely eyed for any impact on the USD-sensitive commodity.

WTI technical levels

A break above $ 45 (round number) could yield a test of $ 45.63 (daily top) beyond which $ 46.19 (daily pivot) could be tested. While a breach of $ 43.50 (psychological levels) would expose $ 43.03 (early Nov lows), below which downside opens up for a test of $ 42.20 (mid-Nov lows).

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.

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