- WTI bears fight back control amid heightening oversupply concerns.
- 20-year low of $16.59 at risk amid bearish sentiment.
- Dollar strength, coronavirus led demand concerns to weigh.
WTI (futures on NYMEX) is testing the $ 17 mark once again, having failed its recovery from fresh 20-year lows of $16.59.
The sellers continued to lurk near 17.80 region, knocking-off the US oil back towards the lowest levels seen since 1999. At the time of writing, WTI is down nearly 6% at 17.05 levels.
Oil fundamentals remain bleak amid coronavirus crisis
Friday’s rout extended into Monday and the black gold crumbled nearly 20% in early Asia, in the wake of intensifying global oil demand concerns induced by the coronavirus pandemic led economic disruption. Meanwhile, the supply glut worries continue to haunt alongside, with the US storage facilities already full on capacity.
Grim forecasts from the OPEC and the International Energy Agency (IEA) on the outlook for oil consumption have reinforced the bearishness and exacerbated the pain in the barrel of WTI. The IEA warned last Wednesday that “there is no feasible agreement that could cut supply by enough to offset such near-term demand losses.”
Markets also doubt the effectiveness of the OPEC+ output cut deal reached last week, in order to stabilize the market. Adding to this, broad-based US dollar strength amid increased haven demand continues to dent the sentiment around oil. A stronger greenback makes the USD-denominated oil expensive for foreign buyers.
Attention now remains on the coronavirus-related headlines on the economic impact and US supply reports due later this week for further trading momentum.
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