WTI slumps to fresh two-week lows below $38

• Crude oil prices are suffering heavy losses on Thursday.
• Rising coronavirus cases hurt the energy demand outlook.
• Uncertainty surrounding US stimulus weighs on crude oil.

After rising nearly 2% on Wednesday, the barrel of West Texas Intermediate (WTI) spent the first half of the day consolidation its gains near $40. However, with the market mood turning sour during the American session, the WTI fell sharply and touched its lowest level in two weeks $37.60 before recovering modestly. As of writing, the WTI was down 4.15% on a daily basis at $38.18.

Dismal energy demand outlook drags WTI lower

Resurfacing concerns over an uneven recovery in global energy demand amid the rising number of COVID-19 cases globally, especially in Europe, continue to weigh on crude oil prices. Earlier in the day, the UK reported 6,914 new cases on Thursday and the French Health Ministry announced that the Paris region has passed three thresholds for the maximum alert.

On the other hand, citing a Libyan industry source, Reuters reported on Thursday that Libya’s oil output has risen to 270,000 barrels per day to put additional weight on crude oil prices. 

Meanwhile, the uncertainty surrounding the next coronavirus stimulus bill in the US is making it difficult for the WTI to recover its losses. US House Speaker Nancy Pelosi said on Thursday that Republicans and Democrats were still far apart on state and local aid but added that she was still optimistic about reaching a deal.

Technical levels to watch for