Another day, another drop in crude oil prices. Indeed, prices of the barrel of WTI have accelerated the recent breakdown of the $50.00 mark and dropped to fresh 2020 lows in the $48.80 region.
WTI weaker on coronavirus, looks to data
Prices of the West Texas Intermediate tumbled further and recorded fresh 14-month lows in sub-$49.00 levels on Wednesday in response to increasing panic over the impact of the Chinese COVID-19 on the demand for crude oil, and, in general, to the global growth prospects.
In fact, crude prices eroded initial gains after hopes of deeper oil output cuts by the OPEC+ were offset by developments from the fast-spreading coronavirus, as more cases were reported outside China.
It is worth mentioning that the cartel will meet on March 5-6 in Vienna, with an extension of the current agreement to curtail production and the probability of implement deeper cuts on top of the agenda.
In addition, the API reported late on Tuesday another weekly build in US crude oil supplies, this time by around 1.3M barrels. Later on Wednesday, it will be the EIA’s turn to publish its official weekly report on crude stockpiles.
What to look for around WTI
In the very near term, jitters surrounding the fast-spreading COVID-19 are expected to keep weighing on prices along with persistent worries over the excess of supply of the markets. On the supportive side - albeit relegated by the current coronavirus developments - emerges the situation in Libya, which not only remains unsolved, but it is also worsening by the day.
WTI significant levels
At the moment the barrel of WTI is losing 1.62% at $49.02 and a breach of $48.81 (2020 low Feb.26) would aim for $42.20 (2018 low Dec.24) and finally $41.83 (2017 low Jun.21). On the other hand, the next resistance of note emerges at $51.38 (21-day SMA) seconded by $54.40 (monthly high Feb.20) and then $56.16 (200-day SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold rises above $2,340 as US yields retreat
Gold gained traction and advanced above $2,340 in the European morning on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.7% ahead of key inflation data from the US, helping XAU/USD stretch higher.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.