- OPEC+ supply cuts hopes, risk recovery power oil price-rebound.
- Focus on the API Crude Stocks data for the next direction.
- Crude Oil Futures: (Still) scope for further decline?
WTI (oil futures on NYMEX) stages a solid recovery from a thirteen-month low reached at $49.66 in early Asia. At the press time, the price trades around $51 mark, having hit a daily high at $51.28.
The black gold’s 2% relief rally so far this Thursday can be mainly attributed to the increased expectations that the OPEC and its allies (OPEC+) will extend the oil output cuts to counter the negative effect of China’s coronavirus outbreak on the demand for oil and its products globally.
Further, the recovery in the risk sentiment across the financial markets also collaborated with the rebound in the higher-yielding oil. Fears over the coronavirus scare on the global economic growth seem to have abated for now, in the wake of Beijing’s focussed monetary policy response and containment efforts.
In the last minutes, the upside momentum appears to have fizzled out, as the bulls take a breather ahead of the American Petroleum Institute (API) weekly US Crude Stocks data, due at 2130 GMT. Also, markets weigh in the latest downbeat comments from BP’s Chief Financial Officer Brian Gilvary on the 2020 oil demand outlook.
Gilvary said that the global economic slowdown in the wake of China’s coronavirus outbreak is set to reduce global oil demand in 2020 by up to 0.5%, as cited by Reuters. Its worth noting that oil prices are already down by over 20% from their early January peak.
WTI Technical levels to consider
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