WTI drops to 17-year lows in sub-$24.00/bbl levels

• Prices of the WTI drops to levels last seen in 2002.
• COVID-19 fears, price war, oversupply jitters weigh on oil.
• The EIA’s weekly report is coming up next on the docket.

Prices of the American reference for the sweet light crude oil are extending the downside to the area below the $24.00 mark per barrel on Wednesday.

WTI in 17-year lows around $24.00

The black gold remains well on the defensive for yet another session as there is no signs of any respite from the selling pressure.

Crude oil trades on a much weaker tone on Wednesday, always against the backdrop of rising panic around the coronavirus and its impact on the global economy along with almost omnipresent oversupply concerns and the ongoing Russia-Saudi Arabia price war, which has exacerbated the downside as of late.

All in all, prices of the West Texas Intermediate are navigating the $24.00 zone on Wednesday – area last visited in April 2002 – with prospects of a rebound absent for the time being.

In the meantime, the API reported a 0.421M barrels drop during last week late on Tuesday, reversing a tad the previous 6.4m barrels build. Later today, the EIA will report on the US crude oil inventories for the past seven days.

What to look for around WTI

Crude oil prices remain under pressure amidst challenges from the demand side via the impact of the COVID-19 on the global economy, and particularly on the Chinese economy, which is the second largest oil importer in the world. Negative drivers on the supply side come from the ongoing Russia-Saudi Arabia price war, which is expected to remain unabated in the near-term and aggravated by recent news that Saudi Arabia plans to increase its oil production and exports by more than 10M bpd in the short-term.

WTI significant levels

At the moment the barrel of WTI is losing 10.02% at $24.11 and a breach of $23.62 (2020 low Mar.18) would expose $23.31 (monthly low Apr.2002) and finally $21.62 (monthly low Mar.2002). On the upside, the next resistance lines up at $36.28 (high Mar.11) seconded by $40.00 (round level) and then $41.58 (21-day SMA).