Search ForexCrunch
  • WTI trades within the familiar range around the $51.00 area.
  • Traders’ attention remains largely on COVID-19 headlines.
  • API’s weekly report on US crude inventories coming up next.

Prices of the West Texas Intermediate are alternating gains with losses on Tuesday, looking to stabilize following Monday’s sharp sell-off.

WTI vigilant on coronavirus, OPEC+

The WTI keeps a $1-ish range on Tuesday against the backdrop of increasing cautiousness among traders regarding the potential impacts of the Chinese COVID-19 on the global economy, and in particular, on the demand for crude oil.

Fresh concerns re-emerged at the beginning of the week after new cases of the coronavirus emerged in South Korea, Iran and Italy, triggering an exodus to the safe havens and forcing prices of the American reference for the sweet light crude oil to shed nearly 5% at the worst moment, just to close a tad above it afterwards.

Regarding the OPEC+, the cartel has still to decide whether to extend the ongoing output cut agreement or implement deeper production cuts. It is likely that any decision on the matter will have to wait until de cartel’s meeting on March 6th in Vienna.

Later in the NA session, the API will publish its weekly report on US crude oil supplies ahead of Wednesday’s official report by the DoE and Friday’s oil-rig count by driller Baker Hughes.

What to look for around WTI

In the very near term, jitters surrounding the fast-spreading COVID-19 are expected to keep weighing on prices along with persistent worries over the excess of supply of the markets. On the supportive side – albeit relegated by the current coronavirus developments – emerges the situation in Libya, which not only remains unsolved, but it is also worsening by the day. No news instead from the OPEC+, which is due to meet early in March.

WTI significant levels

At the moment the barrel of WTI is losing 0.68% at $50.81 and a breach of $50.00 (key support level) would aim for $49.31 (2020 low Feb.5) and finally $42.20 (2018 low Dec.24). On the upside, the next hurdle aligns at $54.40 (monthly high Feb.20) seconded by $56.23 (200-day SMA) and then $59.73 (high Jan.20).