WTI stays pressured below $69.00 on firmer USD, oil demand fears
- WTI extends pullback from weekly top, refreshes intraday low.
- IEA, OPEC raised concerns over oil demand amid Delta covid variant fears.
- US-Afghan talks may placate Taliban-led jitters, suggesting higher supplies.
- US data, risk catalysts are important for bear’s return.
WTI crude oil prices drop to the fresh intraday low of $68.58, down 0.23% on a day, amid the initial Asian session on Friday. In doing so, the energy benchmark strengths the previous day’s downbeat performance amid coronavirus woes and mixed headlines concerning the geopolitical plays in the Middle East.
The black gold snapped a two-day uptrend the previous day after the International Energy Agency (IEA) cut the 2021 oil demand forecast, expecting a rise of 5.3 million barrels per day (mbpd) in 2021, further 3.2 mbpd in 2022. The IEA also said, “New COVID-19 restrictions, particularly in Asia, set to reduce oil usage.”
On the same line, the Organization of the Petroleum Exporting Countries (OPEC) announced that it left the 2021 and 2022 world oil demand growth forecasts unchanged despite concerns over Delta variant weighing on energy demand. Reuters report that OPEC currently expects the global demand to rise by 6.6%, or 5.95 million barrels, in 2021.
Elsewhere, the latest White House statement said that the US Secretary of State Antony Blinken and Secretary of Defense Lloyd J. Austin III spoke today with President of the Islamic Republic of Afghanistan Ashraf Ghani to stress that the US remains invested in the security and stability of Afghanistan amid violence by Taliban.
It should be noted that the US Dollar Index (DXY) regained upside momentum on Thursday, backed by the reflation fears, exerting additional downside pressure on the oil prices.
Moving on, news relating to the virus and geopolitical tension in the Middle East will be important for WTI price. Also, the US Michigan Consumer Sentiment Index for August, expected to remain unchanged near 81.2, will decorate the calendar and shouldn’t be missed as well.
Technical analysis
Failures to cross 10-DMA, around $68.70, redirect oil prices toward a 100-DMA level of $67.47. However, the double-bottom surrounding $65.00 becomes the key support to watch during any further weakness.
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.
