- WTI stays depressed while extending pullback from $40.83.
- Coronavirus woes battle economic optimism in China, US summer driving demand slows.
- Saudi Arabia hikes selling price, another explosion reported in Tehran.
- API data, risk catalysts will be in the spotlight.
WTI benchmark in NYMEX drops to $40.37, down 0.70% on a day, while heading into the European session on Tuesday. The black gold recently eased amid fears that the coronavirus (COVID-19) still poses serious economic challenges, which in turn could weigh on the global energy demand. Further to weigh the oil prices, the US-China tussle and the Brussels-American trade tension gain the headlines.
Be its surge in the pandemic data from the US, Australia and Japan or the economic pessimism spread by the Federal Reserve official Raphael Bostic and the RBA, pandemic woes regain market attention. In doing so, the oil bulls step back near multi-day high whereas sellers look for entry ahead of the American Petroleum Institute’s (API) weekly inventory data, prior -8.156M.
On the contrary, optimism at the world’s largest energy consumer, China, joins another blast in Iran, Libyan unrest and a hike in Saudi Arabia’s crude prices. However, the expected fall of nearly 17% in the US gasoline demand confine the bulls.
Market’s risk-tone remains mostly directionless with Chinese equities failing to propel the Asian stocks. Further, the US 10-year Treasury yields and S&P 500 Futures also printing mild losses by the press time.
Although the lack of major/event will keep API data in the spotlight, trade/virus updates will be important to determine near-term oil price moves. Additionally, the recent geopolitical tension in the Middle Ease should also be observed closely in case of any surprises.
Technical analysis
Unless providing a daily closing beyond $40.85, the oil bulls are less likely to attack June month’s top near $41.65.
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