- WTI registers five-day losing streak while nearing the multi-year low.
- IMF’s downbeat economic forecasts weigh on the demand outlook amid coronavirus crisis.
- A persistent rise in the oil inventories keeps sellers hopeful.
Be it the risk of diminishing demand or a steady increase in stockpiles, WTI justifies it all with a fifth day of losses, currently down 1.25% to $19.85, during the early Wednesday. In doing so, the energy benchmark seesaws near the multi-year low of $19.00.
On Wednesday, the commercial crude oil inventories in the US, as per the Energy Information Administration (EIA), increased by 19.2 million barrels in the week ending April 10, 2020. This follows the private data, published Tuesday by the American Petroleum Institute’s (API), which suggested an increase of 13.143 million barrels into the inventories versus the previous addition of 11.938 million barrels.
It should also be noted that the global production cut accord, worth 9.7 million barrels a day, was earlier considered lesser than the wide forecasts of 20 million barrels.
Not only the supply side, but the demand side catalysts, mainly induced by the coronavirus (COVID-19) crisis also weigh on the energy benchmark.
Having predicted a global recession during the early week, the International Monetary Fund (IMF) recently said that Asia-Pacific growth in 2020 will grind to a halt for the first time in 60 years.
As a result, the market’s risk-tone remains heavy with Asian stocks in red and the US bonds in demand.
It should also be noted that the US dollar strength exerts additional downside pressure on the commodities and could be considered for oil’s latest declines.
Looking forward, energy traders will keep eyes on the demand-supply matrix, as well as the virus updates, for fresh impetus. Further to note will be the US economic data and the Trump administration’s action to combat the virus.
Technical analysis
While 10-day SMA near $23.50 restricts the black gold’s immediate upside ahead of the monthly top near $28.90, sellers may target the year 2001 low, surrounding $16.40 if the prices stay weak below $19.00.
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