- WTI steps back from one week high.
- Fears of coronavirus weigh on news of rocket strikes on the US military base in Iraq.
- US data, risk news and Baker Hughes rig count on the radar.
WTI declines to $51.65 by the press time of the Asian session on Friday. The energy benchmark seems to struggle in cheering the latest news from Iraq amid coronavirus fears.
AFP conveyed the news that the US military base in Kirkuk, Iraq, was slammed by a rocket fired by a hardline Iraqi military faction close to Iran.
However, the black gold couldn’t expect the fresh rift between the US and Iran as oil traders are busy fearing coronavirus impact on the energy demand.
Even if the US Energy Secretary Brouillette downplayed the risk of coronavirus outbreak on oil prices, the International Energy Agency’s (IEA) cut to global demand forecast weighs on the energy benchmark. The IEA announced a cut to the 2020 oil demand growth forecast on Thursday by 365,000 bpd to 825,000 bpd on coronavirus outbreak, the lowest since 2011.
Additionally, recently rising inventory levels, as well as no consent of Russia to the global oil producer’s push towards further output, also exert downside pressure on oil prices.
Traders will now watch for coronavirus headlines while also waiting for the weekly Baker Hughes US Rig Counts, previous 676, for fresh near-term direction. It should also be noted that the escalation of the US-Iran tension could help the WTI benchmark.
Technical Analysis
A Doji candlestick on the daily chart seems to trigger fresh declines towards $50.00. However, the recently flashed multi-month low around $49.40 will be the key support to watch. On the upside, a sustained break of $52.30 will negate the bearish candlestick formation and could push the oil benchmark towards 21-day SMA near $53.10.
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