- Prices of the WTI extends the leg lower to the $38.00 area.
- Traders remain concerned over the impact of the pandemic on oil demand.
- API, EIA weekly reports on crude oil supplies next of note in the docket.
Prices of the barrel of the American benchmark for the sweet light crude oil trade on the defensive at the beginning of the week around the $38.50/40 band.
WTI weaker on demand, supply concerns
Prices of the WTI lost further ground on Monday in response to increasing coronavirus cases in the US and Europe, where several countries have already implemented new restrictions.
Extra pressure on oil prices comes from increasing gasoline stockpiles in the US and Europe, also indicative of the weak demand. This scenario is exactly the opposite in Asia, where fuel demand remains on the rise as well as jet fuel.
Adding fuel to the fire, but from the supply side, Libya keeps increasing its crude oil production and exports after the country recently lifted the force majeure on the Sharara and the El-Feel oilfields.
On the brighter side (if any), the OPEC+ has still to decide whether to postpone its planned increment of oil output as soon as in early 2021.
As usual in the oil docket, the API and the EIA will publish their weekly reports on US crude oil inventories on Tuesday and Wednesday, respectively.
WTI significant levels
At the moment the barrel of WTI is down 2.98% at $38.55 and a breach of $37.54 (200-day SMA) would expose $36.66 (monthly low Oct.2) and then $36.15 (monthly low Sep.8). On the other hand, the next up barrier is located at $41.87 (monthly high Oct.20) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3).