WTI plummets to 3-week lows near $54.50 on China, Norway

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  • The barrel of WTI trades deep into the red below the $55.00 mark.
  • Norway’s fund is planning to sell its holdings of oil and gas companies.
  • Fears over a Chinese slowdown spooked traders following data.

The barrel of the American benchmark for the sweet light crude oil has come under increasing selling pressure today and is now navigating the area of fresh 3-week lows in sub-$55.00 levels.

WTI weaker post-China data releases

Prices of the West Texas Intermediate have broken below the key $55.00 mark per barrel after Chinese Exports contracted nearly 21% on a year to February and Imports went down more than 5% on a yearly basis. The resulting trade surplus also came in on the weak side, narrowing to $4.12 billion from January’s $39.16 billion.

These results sparked renewed concerns over the potential slowdown in the Chinese economy, regarded as the largest crude oil importer in the world. Today’s results add to the recent revision lower in China’s GDP for the next periods.

Further news around oil cited Norway is planning to sell its holdings of refiners and producers in its sovereign wealth fund (Government Pension Fund) of around $1 trillion. Among these companies are BP, Total and Shell.

Later in the day, Baker Hughes will report on the weekly US drilling activity.

What to look for around WTI

The potential trade agreement between US and China keeps supporting traders’ sentiment and collaborates with the view of higher prices despite hopes have been declining in past days. In spite of the current decline, the underlying bullish view on crude oil remains supported by tight conditions in the US markets (amidst US net imports in historic low levels and the rising activity in refiners ahead of the summer session), the so-called ‘Saudi Put’ plus the current OPEC+ agreement to curb production and ongoing US sanctions against Iran and Venezuela.

WTI significant levels

At the moment the barrel of WTI is retreating 2.75% at $54.70 facing the next support at $54.50 (low Mar.8) seconded by $52.42 (55-day SMA) and then $51.15 (low Feb.11). On the other hand, a breakout of $57.60 (2019 high Mar.1) would open the door to $58.00 (high Nov.16 2018) and finally $59.63 (50% Fibo retracement of the October-December drop).

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