WTI slumps to three-month low near $52 on China coronavirus contagion
- WTI sellers extend control amid growing China coronavirus concerns.
- Coronavirus contagion threatens global economic growth and dents risk.
- Eyes on US weekly Crude Stock data and virus updates for fresh direction.
The selling pressure around WTI (oil futures on NYMEX) remains unabated so far this Monday, as the price crashed nearly 4% to $52.19 in the last hour, having reached the lowest levels since early October.
The prices started out the week on a negative note and continue to remain under heavy selling pressure, extending its week-long losing streak. Growing concerns over the rapid spread of the China coronavirus outbreak internationally as well as the negative impact this will have on the oil demand growth outlook weigh on the black gold. With the virus’s ability to spread, markets remain wary over its implications on the global economy.
Additionally, increased safe-haven demand for the US dollar across the board, in response to the coronavirus scare induced risk-off market profile, collaborates with weakness in the prices. A stronger greenback makes the USD-denominated oil expensive to the holders in foreign currencies.
Meanwhile, analysts at Goldman Sachs said in their latest note, “investor fears on oil demand have risen considerably, driven by unfavorable U.S. inventories and ... concerns on impact from the coronavirus outbreak.”
Looking ahead, the latest updates on the China coronavirus outbreak will continue to influence the broader market sentiment and dollar trades, eventually impacting the barrel of WTI. Markets also look forward to the US weekly Crude Stocks Change data due later this week for near-term trading direction.
WTI Technical levels to consider