- Prices of the WTI gains some poise above the $20.00 mark.
- A “ceasefire” between Russia and Saudi Arabia looks unlikely.
- The EIA will publish its weekly report on US crude oil supplies later.
Prices of the West Texas Intermediate are showing some signs of life above the key $20.00 mark per barrel on Wednesday.
WTI remains fragile, looks to data
Following five consecutive daily pullbacks and the worst quarter/month performance in history, the barrel of WTI has started April on a positive footing above the key $20.00 mark.
However, sentiment among traders remain fragile to say the least against the backdrop of the unabated Russia-Saudi Arabia price war and very pessimistic prospects for the oil demand on the back of the COVID-19 fallout. Further bad news came after the US government predicted between 100K and 240K coronavirus deaths in the country.
In the docket, a nearly 10.5M build in US crude oil supplies reported by the API late on Tuesday also lends support to the negative view surrounding oil. Later in the session, the DoE will publish its official weekly variation of oil stockpiles.
What to look for around WTI
Crude oil prices remain under unabated pressure despite the ongoing rebound from new 18-year lows near $19.00 per barrel recorded at the beginning of the week. The broader picture, however, remains unchanged and dominated by supply and demand concerns stemming from the Russia-Saudi Arabia price war and the impact on the industry of the coronavirus. Also adding to oversupply concerns, there is still the palpable possibility that Saudi Arabia could carry on with its plans to increase oil exports by more than 10M bpd in May. A potential relief to this low-lower-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, Saudi Arabia and some other countries, although this is regarded as quite a long shot at the moment.
WTI significant levels
At the moment the barrel of WTI is gaining 1.75% at $20.45 and a breach of $19.29 (2020 low Mar.30) would expose $17.12 (monthly low November 2001) and finally $10.65 (monthly low December 1998). On the upside, the next resistance aligns at $25.20 (weekly high Mar.25) followed by $28.46 (high Mar.20) and then $28.75 (21-day SMA).
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