- WTI fades Friday’s recovery moves, stays depressed around intraday low.
- Risk-off extends as virus woes join reflation fears and Turkey’s political drama.
- Saudi-Iran tussle, Venezuela’s blast in pipeline tract fails recall bulls amid fading recovery hopes.
WTI flirts with an intraday low of around $61.00, down 0.65% on a day, after edging lower at the weekly open. In doing so, the oil benchmark fails to extend Friday’s recovery moves as risk-off mood weighs on the commodities.
While tracing the downbeat sentiment, the return of the coronavirus (COVID-19) risks in the European Union (EU) countries and challenges to further easy money policies by the global central banks seem to take the lead. Germany is up for extending the virus-led lockdown to April whereas the Fed’s verdict to let the Supplementary Leverage Ratio (SLR) concession expire at the end of March, as planned, suggest liquidity crunch and probable tapering.
It should, however, be noted that the Saudi-Iran tussle and blast in pipeline track in Venezuela couldn’t keep the oil bulls on the table as global markets remain skeptical of economic recovery.
Other than the risk catalysts, the International Energy Agency’s (IEA) steady oil demand forecast for 2021 also challenges the black gold traders off-late.
Looking forward, the US dollar moves and risk news should be given major attention for near-term direction. Among the risk news, virus and the central bank moves seem to take the driver’s seat.
Technical analysis
Failures to extend bounce off 50-day SMA, currently around $58.80, favor WTI sellers. Alternatively, oil buyers need to cross the 21-day SMA level of $63.00 before eyeing the monthly resistance line near $64.65.
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