- Economic woes, rising US supplies offset OPEC cuts, US sanctions on Iran, Venezuela.
- IEA monthly oil market report: Keeps forecast of global oil demand growth for 2019 at 1.4 m bpd
- Technical charts point to overbought conditions, further downside likely.
WTI (oil futures on NYMEX) finally cracked the key resistance-turned-support at 64.00, as the sellers remain in command so far this Thursday, as the sentiment remains weighed down by mounting concerns over the economic slowdown and surging US crude supplies.
The recent downward revision to the 2019 global growth forecasts made by the IMF combined with the renewed US-EU trade worries continue to cast doubt on the global economic growth and its impact on the oil demand.
Meanwhile, the latest EIA report showed that the US crude inventories rose 7 million barrels to 456.6 million barrels in the last week, their highest since November 2017. The US crude output level remained at a record 12.2 million barrels per day (bpd).
These concerns outweigh the optimism derived from the ongoing OPEC supply cuts and the US sanctions on Iran and Venezuela that helped the prices reach five-month tops earlier this week. The latest IEA monthly oil market report showed that the Venezuelan oil output plummets to 870,000 bpd on outages and sanctions, as cited by Reuters.
Looking ahead, the black gold could continue its downward journey, with the technical setup in favor of the bears while markets digest the latest IEA report heading into the US PPI release and Fedspeak that could have some impact on the USD-denominated oil.
WTI Technical Levels
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