- Prices of the WTI drops around 6% to the $35.00 area on Thursday.
- Fast-spreading pandemic, USD-strength weigh on crude oil.
- EIA’s weekly build (Wednesday) adds to supply concerns.
Crude oil prices accelerate the decline to the area of multi-month lows in the $35.00 neighbourhood.
WTI weaker on demand, supply concerns
Prices of the WTI drops to 4-month lows near the $35.00 mark per barrel in the second half of the week as traders continue to track the unremitting advance of the coronavirus pandemic and its impact on the demand for the commodity.
In fact, fresh restrictions in Germany, France and Spain add to the fragile situation in the UK and recent social effervescence in Italy, all against the backdrop of the rapid spread of the second wave of the coronavirus pandemic in the Old Continent.
Adding fuel to the fire, the EIA informed on Wednesday that US crude oil supplies unexpectedly increased by around 4.3 million barrels during last week, collaborating with the already rising supply jitters. Another source fuelling this view comes from Libya, where the country continues to increase its production/export capacity after months of blockade.
WTI significant levels
At the moment the barrel of WTI is losing 5.92% at $35.14 and a breach of $38.38 (monthly low Jun.15) would expose $30.73 (low May 22) and then $29.11 (monthly high Apr.3). On the flip side, the next up barrier is located at $37.23 (200-day SMA) followed by $40.26 (55-day SMA) and finally $41.87 (monthly high Oct.20).
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