WTI tumbles to 2-day lows near $39.40 ahead of EIA

Prices of the WTI slipped back below the $40.00 mark.
The API reported an unexpected 5,,4 million drop on Wednesday.
The EIA’s weekly report comes up next in the docket.

Pablo Piovano FXStreet

Crude oil prices erase the recent advance to tops beyond the $41.00 mark per barrel and drop to 2-day lows in the $39.40 region on Thursday.

WTI looks offered ahead of EIA’s report

Following two consecutive daily gains, prices of the American reference for the barrel of the sweet light crude oil trade on a soft note on Thursday despite the API reported an unexpected 5.4 million barrel draw late on Wednesday. The significant drop in supplies, however, is deemed as short-lived as it was a direct consequence of the pass of the Hurricane Delta, according to oil analysts.

In the meantime, the rapid spread of the coronavirus pandemic in the Old Continent coupled with countries implementing new restriction measures brought in renewed demand concerns, hence the downside pressure on prices.

Moving forward, the EIA will report on US crude oil stockpiles later in the NA session, while driller Baker Hughes will publish its weekly oil rig count on Friday.

WTI significant levels

At the moment the barrel of WTI is down 3.98% at $39.43 and a breach of $39.07 (weekly low Oct.12) would aim for $38.17 (200-day SMA) and then $36.66 (monthly low Oct.2). On the upside, the next hurdle is located at $41.46 (weekly high Sep.18) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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