- WTI weighed down growing coronavirus concerns.
- IEA oil demand forecasts fail to impress oil bulls.
- US oil on track to book nearly 3% weekly loss.
WTI (August futures on Nymex) extends the steep declines seen on Thursday to drops over 1.50% in the European session this Friday. The oil bears breach the 39 level to hit the lowest levels in eight days at 38.76.
Having failed to sustain above the 41 level earlier this week, the sellers have returned with pomp and show, especially with the coronavirus risks resurging alongside. The record rise in virus cases across the US stats and localized lockdowns in most global hotspots have watered down on a quicker economic rebound hope.
Doubts over the global economic recovery undermine the oil demand growth outlook, exacerbating the pain in the black gold. The US oil remains on track to book about a 3% weekly loss. Meanwhile, US-China trade tensions combined with the brewing political uncertainty in the US also weighs on the higher-yielding oil.
Amid looming virus risks, oil bulls ignored the latest report released by the International Energy Agency (IEA), in which it raised the oil demand growth forecast for this year while weighing in the COVID-19 resurgence.
Also, the optimism over the signs of recovery in the US fuel demand was negated by the global growth concerns, keeping the bulls at bay. Attention now turns towards the OPEC and its allies (OPEC+) meeting scheduled on July 15 for fresh updates on the oil output cuts policy.
In the meantime, markets will look forward to the US virus updates, PPI and drilling activity data for fresh trading impetus.
WTI technical levels to watch
“A short-term uptrend line has been breached out which is flashing the downside signal for the time being. The RSI is also turned down from the overbought territory and a bearish crossover on the MACD indicator is also flashing the sell signal. The Red SAR dots also favoring the bears and providing them full strength to fall. The $30 is a strong support level followed by $27.80 whereas $40 is key resistance followed by $41.50,” explains Harish Shahi, an Independent Analyst.
WTI additional levels
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