WTI plummets to $39, down more than 4%

• WTI is suffering its biggest daily percentage decline in more than 10 days.
• Resurfacing demand concerns weigh on crude oil prices.
• Libya’s oil supply is expected to reenter the market.

Crude oil prices closed the previous week sharply higher but erased a large portion of those gains on Monday. As of writing, the barrel of West Texas Intermediate was down 4.2%, the biggest daily percentage decline in nearly two weeks, at $39.15.

Demand-supply dynamics hurt WTI

The rising number of coronavirus infections globally, especially in the US and Europe, revived concerns over an uneven recovery in the energy demand on Monday. Additionally, the flight-to-safety, as reflected by heavy losses witnessed in global equity indexes, is putting additional weight on risk-sensitive crude oil prices.

Meanwhile, latest reports revealed that Libya’s Sharara oil field have restarted its operations, suggesting that more oil is likely to enter the market in the near-term. Commenting on the matter, “at this stage, we should watch for some time,” one OPEC sources told Reuters. “But the market is reacting much faster on bearish sentiment.”

Later in the week, developments in Libya and the US Energy Information Administration’s and the American Petroleum Institue’s crude oil inventory reports will be looked upon for fresh impetus.

Technical levels to watch for