WTI off eight-day lows, still in the red around $22 ahead of API

• WTI slips as coronavirus-led demand concerns negate OPEC+ deal.
• Broad USD weakness could cushion the downside in the US oil.
• All eyes on the virus updates and API Crude Stocks data.

WTI (oil futures on NYMEX) extends its bearish momentum into a third day on Tuesday, having posted a new eight-day low at 21.70 in the last hour. At the time of writing, the US oil has managed to regain the 22 handle, still shedding 1.50% on a daily basis.

The black gold rallied to near 23.10 region in early Asia, mainly driven by the US Energy Information Administration (EIA) prediction that shale output in the world’s biggest crude producer would fall by a record amount in April.

Meanwhile, upbeat Chinese trade data also lifted the mood and kept the prices at higher levels before concerns over the oil demand growth outlook resurfaced, as the coronavirus crisis is a long way to go. China’s crude oil imports in March rose by 4.5% YoY, as reported by the China Customs.

Also, the barrel of WTI looks vulnerable as oil traders were somewhat let down by the OPEC+ output cut deal reached on Sunday, despite the output cuts being equal to about 10% of global supply before the viral outbreak.

The OPEC and non-OPEC producers (OPEC+), finally, agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June. Along with the US and other countries, the total estimates output cut is about 19.5 billion bpd.

Markets now look forward to the US crude supplies report due to be published by the American Petroleum Institute (API) later today at 2030 GMT for near-term trading opportunities. In the meantime, broad-based US dollar weakness could help cushion the downside in the USD-sensitive oil.