- Renewed coronavirus concerns spur risk-off, knock-off oil.
- Saudi OilMin comments also weigh on the black gold.
- Virus headlines and API Crude Stocks data to determine the next moves.
WTI (oil futures on NYMEX) took a sharp U-turn in early Europe and dropped back in the red zone on the 51 handle, as markets sold off riskier assets amid reports of increase in new coronavirus cases and deaths outside China.
Coronavirus news remain the key driver
Both South Korea and Iran reported more coronavirus deaths while investors continued to fret over the heightening virus contagion risks and its growing concerns on the global economic outlook. A slowdown in the global growth will likely dent the demand for oil and its products, in turn rendering oil negative.
With the latest leg lower, the black gold is headed back towards the two-day low of $50.45 reached on Monday, having stalled its steady recovery just above the 52 mark.
The barrel of WTI saw a corrective bounce earlier today, as risk reset emerged after China’s Hubei province reported a decline in the number of deaths and cases while the authorities in Beijing called for a return to normalcy in some regions.
Looking ahead, the broader market sentiment will continue to influence the oil-price action amid incoming coronavirus updates. Attention also remains on the US Consumer Confidence data and the weekly Crude Stocks data due to be published by the American Petroleum Institute (API).
WTI technical view
“Long positions above 51.10 with targets at 52.00 & 52.30 in extension. Below 51.10 look for further downside with 50.80 & 50.45 as targets. The RSI is mixed to bullish,” Swissquote Bank Research Team notes.
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