WTI consolidates near 13-month low amid coronavirus-led demand concerns
- Oil wilts on coronavirus pandemic fears led oil demand concerns.
- Uncertainty over OPEC+ March meeting also adds to WTI’s downside.
- Markets eye virus updates and US data for fresh directives.
Bears take a breather, allowing a phase of consolidation in WTI (oil futures on NYMEX) over the last hours, as they keep an eye on fresh coronavirus-related developments globally and the key US growth numbers for the next push lower.
Despite the downside consolidative mode, the black gold loses nearly 1%, currently trading around 48.30, having hit a new 13-month low at 47.83 in early trades.
The US oil extends its bearish momentum into a fifth straight day on Thursday, as the rapidly spreading coronavirus outside China re-ignited fears of a pandemic and global economic slowdown, which would eventually hamper the demand for oil and its products.
The infectious disease is rapidly spreading across the European continent just as the number of new cases rises in the US, South Korea, Iran and Iraq. In the face of growing pandemic fears, the US dollar is broadly offered amid rising Fed rate cut bets, as the US policymakers look to cushion the negative impact of the virus on the economy.
Therefore, the barrel of WTI could likely have found some support from broad-based US dollar weakness that has temporarily helped stall the downward spiral. A weaker greenback makes the USD-denominated oil cheaper for foreign buyers.
From a broader perspective, the risks remain skewed to the downside in oil amid the looming coronavirus risks and an increase in the US crude inventories. The Energy Information Administration (EIA) data showed on Wednesday, the US crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels.
OPEC+ March meeting?
Additionally, doubts over the likely OPEC and its allies (OPEC+) March 5-6 Vienna meeting also remains a weight on the prices. OPEC’s Secretary-General Mohammed Barkindo said earlier today that they are monitoring the coronavirus spread ahead of its scheduled March 5-6 meeting after a suspected case of the infection being reported in Vienna near the secretariat.
WTI technical levels to watch