- WTI registers four-day losing streak.
- Expectations of global production cuts fail to defy calls of depleting demand due to the coronavirus.
WTI refreshes the four-day low to $45.40 while heading into the European session on Friday. The energy benchmark earlier cheered OPEC headlines over likely proposal to extend supply cuts. However, coronavirus (COVID-19) fears, as well as the IEA’s expected reduction in global demand, seem to weigh on the black gold off-late.
The latest statement from the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna suggests that the cartel is likely to propose the 1.5 million barrels per day of an additional production cut to the OPEC+ team, including Russia, till the year-end. The clause was earlier likely to end on June, 30th 2020.
On the contrary, Bloomberg quoted the International Energy Agency (IEA) chief Fatih Birol while making calls to revise down oil demand forecasts due to the deadly virus.
It should also be noted that the pandemic is propelling the risk-off, which in turn drags the US 10-year treasury yields down to record low of 0.808% by the press time.
Investors will keep eyes on the OPEC headlines for intermediate direction while the major market moves are likely to be directed by the coronavirus news.
Technical Analysis
The monthly low surrounding $43.60, also the lowest since late-2018, holds the key to the black gold’s extended south-run to the year 2017 low near $42.70. On the upside, buyers are less likely to enter unless oil prices cross the early-February lows beyond $50.00.
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