- The WTI loses nearly 10% for the week.
- China’s gasoline exports fall to its lowest level in more than a year.
- OPEC is reportedly looking to pull back production to 2016 levels.
Following a strong rebound earlier this week, crude oil failed to push higher and stayed under pressure in the second half of the week. With today’s fall, the barrel of West Texas Intermediate touched its lowest level in more than a year at $50.55.
However, the Wall Street Journal recently reported that Saudi Arabia and OPEC was looking to cut the current production by around 1 million barrels per day to 2016 levels and helped the WTI recover a small portion of its daily losses. According to a Saudi Official, this move would be announced as a plan to retain current output targets first set in 2016. As of writing, the WTI was trading at $51.30, losing 4.65% on the day and still down more than $5 for the week.
Meanwhile, the latest data from China showed that gasoline exports fell to the lowest level since October 2017 to revive concerns over the economic slowdown’s negative impact on one of the world’s biggest oil consumer’s demand outlook. “The market is pricing in an economic slowdown – they are anticipating that the Chinese trade talks are not going to go well. The market doesn’t believe that OPEC is going to be able to act swiftly enough to offset the coming slowdown in demand,” Phil Flynn, an analyst at Price Futures Group in Chicago, told Reuters today.
Technical levels to consider
The initial support for the WTI aligns at $50.55 (daily low) ahead of $50 (psychological level) and $49.10 (Oct. 6, 2017, low). On the upside, resistances are located at $54 (daily high), $54.80 (Nov. 22 high) and $55.85 (Nov. 21 high).
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