WTI testing bull commitments at $40, suffers at the hands of demand concerns

West Texas Intermediate crude is currently trading at $39.97 and down by 2.8% having travelled from a high of $41.57 to a low of $39.81.

Despite a second weekly decline in US crude supplies reported by the Energy Information Administration, the price of oil has been pressured as investors move away from risk assets, including oil.

The rising cases of COVID-19 in Europe, in particular, has impacted investor sentiment mid-week.

Europe's COVID-19 plight and prospects for the EUR/USD

All eyes on OPEC

The potential for more economic shutdowns will impede demand for energy, something for which will be in focus next month when the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, meet to discuss output controls. 

OPEC compliance with production cuts is has helped to protect the downside for oil prices to date but the prospects of the group tapering could be part of why the bid has been pulled. 

''While OPEC+ stopped short of a firm decision on output cuts, the group sent a strong signal of support, warning those that gamble on the group's determination and implying that the November meeting will likely feature a decision on tapering from the group,'' analysts at TD Securities explained.

The analysts are bullish on the longer run of the outlook and have stated, 'with the OPEC+ put nearly at-the-money, we see a potential set-up building for an upside surprise.''

''Normalizing demand expectations, large-scale fiscal stimulus and a potential vaccine announcement shortly following the election, along with an OPEC+ revision to the planned tapering of their historic output deal, should all conspire to offer strong support in energy markets.''

WTI levels