WTI: Bears pile in on Coronavirus and ME threats
- WTI is offered to fresh lows in the Asian open.
- global growth and risk-off themes are affecting the price.
WTI is starting out the day on the offer, opening in a bearish gap and extending the bear trend to a low of $52.19 and lowest levels since October. At the start of the yea, it was all about US-Iranian tensions, and the aftermath of the de-escalation of troubles has continued to weigh on the price in a massive positioning shakeout.
"We continue to expect follow-through selling in the complex, as trend followers further sap liquidity from the market, selling their length and adding shorts," analysts at TD Securities argued.
Indeed, we expect a massive selling program to take place in gasoline and WTI crude, along with with moderate CTA liquidations in Brent crude, as systematic trend followers attempt to capitalize on the downtrend in the energy complex.
What you need to know for the open: Are you anxious about Coronavirus? Well, so are the markets
However, there are now concerns over global growth yet again with worrying developments in China and contagion of the Coronavirus making its way through borders and into the West with the US confirming its 5th case of the virus today.
China's coronavirus death toll rose to at least 80 from 56 today and we will have a briefing from Beijing sometime into the Tokyo open where we can expect more details on the number of confirmed cases then.
On Saturday, President Xi Jinping convened a special meeting of the seven-member Politburo Standing Committee, calling for a more centralized response to the epidemic and asserting personal responsibility in addressing the crisis.
When an epidemic breaks out, a command is issued. It is our responsibility to prevent and control it," Xi said, according to the state-run Xinhua News Agency.
He called for the new high-level committee to "address concerns within and outside the country,” indirectly referencing mounting global concern about the epidemic, which Mr. Xi described as a “grave situation” that was accelerating.
“We definitely can win the battle to contain the epidemic,” Xi vowed.