• Prices of the WTI trade on the defensive above $23.00.
  • Oversupply, demand concerns keep the commodity depressed.
  • The EIA reported a 1.623m barrel build during last week.

Prices of the WTI are fading the optimism seen at the beginning of the week and trade closer to the $23.00 mark per barrel.

WTI focused on price war, COVID-19, data

Following a positive start of the week, prices of the barrel of the American reference for the sweet light crude oil are grinding lower on Wednesday, as oversupply concerns plus the demand shock from the coronavirus keep weighing on traders’ sentiment.

In fact, the Russia-Saudi Arabia price war keeps prices depressed and bullish attempts capped so far, while the impact on the global economy of the fast-spreading COVID-19 keep prices under extra pressure from the demand side.

Ongoing supply/demand concerns among traders have practically ignored any benefit for crude oil prices from the recently clinched agreement between the US government, Democrats and Republicans over a $2 trillion stimulus package to fight the effects on the economy of the coronavirus pandemic.

In the calendar, the EIA’s report showed US crude oil supplies went up by 1.623M barrels during last week, adding to the previous 1.954M barrel build. In addition, supplies at Cushing increased by 0.858 barrels. Additional data from the report showed Distillates Stocks went down by 0.679 barrels and Gasoline Inventories fell by 1.537 barrel.

Late on Tuesday, the API reported a 1.250M barrel drop in US crude oil supplies during last week.

What to wait for around WTI

Crude oil prices remain under heavy pressure in a context of heightened volatility and thin liquidity. As usual in the past weeks, prices of the commodity are hurt by a combination of demand and supply side drivers coming from the ongoing (and future) impact of the coronavirus on the global economy and the unabated Saudi Arabia-Russia price war, aggravated by the palpable possibility that the Kingdom could ramp up production to a record of 12.3Mbpd as soon as in April. A potential relief to this low-prices-scenario could come in the form of a US intervention, which is expected to morph into some sort of agreement between the US, Russia and Saudi Arabia, all aimed to bring in stabilization to the oil market.

WTI significant levels

At the moment the barrel of WTI is retreating 4.13% at $23.32 and a breach of $20.08 (2020 low Mar.18) would expose $17.12 (monthly low November 2001) and finally $10.65 (monthly low December 1998). On the upside, the next resistance aligns at $28.46 (high Mar.20) seconded by $34.84 (21-day SMA) and then $36.28 (high Mar.11).

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

AUD/USD holds onto recovery gains above 0.6050, RBA eyed

AUD/USD stays within the two-hour-old 0.6080-6100 range, currently around 0.6090, while stepping forward for Tuesday’s Asian session. In doing so, the pair holds onto Monday’s recovery gains, mainly due to slightly positive coronavirus (COVID-19) data from Europe, ahead of the key RBA meeting.

AUD/USD News

USD/JPY: Mildly bid above 109 amid mixed sentiment

Having benefited from the recovery in virus data from global hot-spot, while marking a three-day winning streak on Monday, USD/JPY buyers seem to catch a breath around 109.25 amid the early Asian session on Tuesday.

USD/JPY News

Gold: Refreshes four-week high, $1,685 on bulls’ radar

Gold prices remain on the front foot while taking the bids near $1,668, up 0.70%, amid the Asian session on Tuesday. In doing so, the bullion refreshes the four-week high with an intraday peak of $1,674.15 while also marking a fifth consecutive daily gain.

Gold News

WTI snaps three-day winning streak

WTI oil fell by over 8% on Monday, ending a three-day winning streak, which saw prices rise from $19.94 to $29.11. The black gold fell as Saudi Arabia and Russia's decision to delay an emergency meeting to discuss output cuts shifted focus back to oversupply concerns.

Oil News

Johnson Hospitalised, Oil Awaits Treatment

Sterling slipped after UK Prime Minister Boris Johnson was moved to the intensive care unit for coronavirus treatment, but the broad risk trade remained strong on optimism with slowing growth in the number of Corona virus cases. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures