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  • WTI corrects from two-week highs amid global gloom and doom.
  • Supply gut worries resurface despite global output cuts.
  • Oil prices eye deeper fall in 2020 – Reuters poll

WTI (June futures on Nymex) is on a steady decline so far in the European trading, extending the correction from a two-week high of $20.45 reached in early Asia.

The US oil, currently, trades -3.10% at 18.25 after recovering 25% on Thursday and booking an 8% monthly loss. The recent three-day winning streak in the black gold was backed by easing fears over excessive oil supplies and evaporating demand globally, as most major economies veered towards lockdown easing.

Additionally, news that major oil companies announced voluntary crude production cuts and the US considering measures to support the domestic oil companies also help oil prices with its recovery from the historic crash. US Treasury Secretary Steven Mnuchin said on Wednesday, the plan could include adding millions of barrels of oil to already-teeming national reserves.

However, the number of new coronavirus cases (showing no signs of abating) and intensifying global recession fears have reignited oil demand concerns. Meanwhile, the storage problems still loom large, calling for sellers to return this Friday.

Technically, the selling interest is likely to accelerate below the daily pivot point of 17.91, as the next strong support is aligned at $16.17 (20-DMA). To the topside, the two-week high of 20.45 will test the bulls’ commitment in the near-term.