WTI drops over 1.50% to test weekly lows near $40.50

• Oil downed by global growth concerns induced risk-off mood.
• Coronavirus resurgence weighs on fuel demand recovery prospects.
• Markets await US Q2 GDP data after a record slump in Germany’s GDP.

On failure to resist above the 41 level, WTI (futures on Nymex) sellers returned on Thursday, knocking-off the rates to test the weekly lows of 40.48.

The US oil is down 1.65%, at the press time, having quickly pull backed to near 40.70 region. The black gold came under heavy selling pressure, as the risk sentiment turned sour after German Prelim Q2 GDP shrank more-than-expected, underscoring the coronavirus impact on the economy.

Also, traders remain cautious ahead of the US Q2 GDP release, which is likely to show the biggest contraction since 1929. Meanwhile, intensifying concerns over the fuel demand prospects amid the resurgence of coronavirus globally continue to dent the sentiment around the barrel of WTI.

WTI falls for the third straight session as the unexpected draw in the US crude inventories was offset by the rise in the gasoline and distillate stockpiles. Further, adding to the weight on oil, Reuters quoted industry sources, saying that Saudi Arabia may cut its September official selling price (OSP) for crude sold in Asia.

WTI technical levels to watch

“During the quote’s weakness past-$40.00, the monthly low around $38.73 will be in the spotlight. Alternatively, a one-week-old resistance line, at $41.67 now, could restrict the black gold’s immediate upside ahead of the weekly top near $42.00,” explains Anil Panchal, FXStreet’s Analyst.

WTI additional levels