WTI stays depressed below $47.00 even as risks improve
- WTI fades bounce off $46.62 while printing mild losses.
- US dollar stays depressed even as policymakers reach closer to the covid stimulus.
- Worsening virus conditions, lack of major data/events probe energy traders near multi-day high.
WTI drops to $46.71, down 0.05% intraday, during Monday’s Asian session. The energy benchmark keeps Friday’s losses amid the fresh coronavirus (COVID-19) woes emanating from the US and Europe while paying a little heed to the recent risk-on mood. Also should have pleased the black gold traders is the US dollar index (DXY) weakness.
With the record infections and the virus-led death toll, local lockdowns are back into fashion in the US. Also portraying the COVID-19 woes are Germany’s extension of activity restrictions and the Japanese government’s consideration, as per the Kyodo News, to keep Tokyo and Nagoya out from travel subsidies.
Also challenging the black gold could be Friday’s increase in the Baker Hughes US Oil Rig Count from 246 to 258. Furthermore, the surprise jump in the EIA Crude Oil Stocks Change, to 15.189M versus -0.679M prior, exerts additional downside pressure on the WTI oil.
On the contrary, risk-on mood, mainly backed by hopes of US covid stimulus and vaccine news, coupled with the US dollar’s weakness, should have challenged the oil sellers. The DXY drops 0.15% intraday to 90.81 by press time.
Looking forward, oil traders will keep their eyes on the risk catalysts and the US dollar weakness. Among them, the worsening of the COVID-19 can have extra negatives for the WTI.
Technical analysis
An eight-day-old ascending support line, at $45.70 now, offers nearby strong support. Unless breaking the same, oil traders can target March’s top near $48.75.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
