WTI slumps 4% to fresh three-week lows sub-$38 amid coronavirus fears
- WTI dives on demand concerns as coronavirus cases surge in the EU.
- Potential lockdowns in Germany, France hit risk sentiment.
- API crude stocks build raise oversupply fears, EIA data in focus.
WTI (futures on NYMEX) remains heavy in the European session this Wednesday, trading close to the weakest levels in three weeks reached at 37.92.
The US oil is down about 4%, as we write, looking to extend the sell-off amid broad risk-aversion across the financial markets.
Surging coronavirus cases on both sides of the Atlantic coupled with potential nationwide lockdowns likely to be announced in France and Germany to contain the contagion almost killed the demand for higher-yielding assets such as oil.
Meanwhile, the lockdown fears in the EU re-ignited demand concerns for oil and its product, collaborating with the downside in the black gold.
Exacerbating the pain in the WTI barrel, the US weekly crude stockpiles data, published by the American Petroleum Institute (API), showed a bigger-than-expected rise in the crude stocks last week.
Rising US crude supplies and a rebound in the Libyan oil production raise oversupply fears, rendering oil-negative once again.
Oil traders eagerly await fresh virus stats from across the globe and the Energy Information Administration’s (EIA) US crude stocks change data for near-term trading opportunities.
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.
