- WTI bears contemplating amid mixed market sentiment.
- Virus lockdown risks negate US fuel demand recovery signs.
- A daily close above $41 mark needed for further upside.
WTI (August futures on Nymex) is on a steady decline so far this Thursday, having failed to sustain the break above $41 in the US last session. At the press time, the US oil trades 0.32% lower near 40.75, although remains in the recent trade range.
A tug of war between the bulls and bears persists, as the optimism over the US gasoline demand recovery was negated by the fears over the coronavirus lockdowns, especially in the US and Australian states.
The oil market is also holding steady, as they look forward to the OPEC and its allies (OPEC+) meeting on July 15, for fresh cues on its oil output cuts policy. In the meantime, the coronavirus stats and broader market sentiment will continue to entertain oil traders.
Meanwhile, on Wednesday, the price chopped and dropped to test the key 40.35 support after the Energy Information Administration (EIA) data reported an unexpected build in the US crude stocks data. The US crude inventories rose by 5.7 million barrels in the week to July 3, compared with expectations for a decrease of 3.1 million barrels.
However, the dip was short-lived, as the bulls bounced-back and drove the black gold past the 41 barrier, as a bigger-than-expected drop in the US gasoline inventories, stoked expectations of improving fuel demand.
WTI technical levels to watch
“A clear break of $41.15 becomes necessary for the bulls to attack June month’s top near $41.65. Meanwhile, a confluence of 200-HMA and 23.6% Fibonacci retracement of June 23-25 fall, around $39.90, becomes near-term strong support to watch during the quote’s fresh weakness below 100-HMA immediate rest-point of $40.54,” Anil Panchal, Editor and Analyst at FXStreet.com notes.
WTI additional levels
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