- Dour demand outlook, downbeat China’s data drag WTI lower.
- US dollar regains poise amid broad risk-aversion.
- Focus on key US Retail Sales and Rigs count data.
WTI (futures on Nymex) has come under fresh selling pressure and attacks the $42 level, as risk-aversion seeps into the European session and diminishes the demand for the higher-yielding assets such as oil.
The black gold faced rejection just shy of the $42.50 level and therefore, the sellers took over control. Despite the latest leg down, the US oil remains on track to book the second straight weekly gain.
The sentiment around the barrel of WTI remains weighed down by the dour global demand outlook, projected by OPEC and International Energy Agency (IEA) in their monthly oil market report.
Meanwhile, below-forecasts Chinese Retail Sales and Industrial Production data, suggested that the economic recovery from the coronavirus pandemic is losing steam. China’s economic concerns also weighed on oil prices. The dragon nation is the world’s second-biggest oil consumer.
Additionally, the renewed demand for the safe-haven US dollar amid tepid risk tone also collaborated with the downside in oil. A stronger greenback makes the dollar-denominated oil expensive for foreign buyers.
However, the bulls continue to draw support from the drawdown in the US weekly crude stockpiles, which suggested that refiners ramped up production while demand for oil products improved.
Markets now look forward to the critical US consumer spending report and rigs count data for the next direction in the prices.
WTI technical levels
“The black gold’s further downside becomes doubtful amid upbeat RSI conditions, which if ignored could propel the south-run towards $40.80 and the monthly low near $39.75. Alternatively, the commodity’s sustained break of 200-day SMA, $42.85, will have to refresh the monthly high of $43.62 before targeting the February month peak surrounding $44.00, FXStreet’s Analyst, Anil Panchal, explained.
WTI additional levels to watch
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