WTI regains traction and bounces off lows near $20.00
- Prices of the WTI show signs of life after falling to $20.00/bbl.
- The barrel of WTI dropped to 18-year lows on Wednesday.
- Coronavirus impact, oversupply concerns keep weighing on sentiment.
Prices of the barrel of the WTI are attempting some recovery in the second half of the week following Wednesday’s drop to nearly 2-decade lows around $20.00.
WTI focused on COVID-19, price war
After three consecutive daily pullbacks, prices of the barrel of the American reference for the sweet light crude oil are finally seeing some light at the end of the tunnel and are regaining some traction.
In fact, prices advanced around $4 since Wednesday’s 18-year lows in the $20.00 neighbourhood to today’s tops around $24.00 in what is more regarded as a technical bounce.
In the meantime, crude oil prices keep facing demand concerns via the impact of the coronavirus on the world economy, and supply effervescence on the back of the so far unabated price war between Russia and Saudi Arabia.
Earlier in the week, the EIA reported a nearly 2M barrel build in US crude oil supplies during last week, adding to the downbeat sentiment in prices.
What to look for around WTI
Crude oil prices remain under pressure amidst challenges from the demand side via the impact of the COVID-19 on the global economy, and particularly on the Chinese economy, which is the second largest oil importer in the world. Negative drivers on the supply side come from the ongoing Russia-Saudi Arabia price war, which is expected to remain unabated in the near-term and aggravated by recent news that Saudi Arabia plans to increase its oil production and exports by more than 10M bpd in the short-term.
WTI significant levels
At the moment the barrel of WTI is advancing 2.19% at $22.83 and faces the next hurdle at $24.00 (high Mar.19) seconded by $30.43 (10-day SMA) and finally $36.28 (high Mar.11). On the other hand, a breach of $20.08 (2020 low Mar.18) would expose $17.12 (monthly low November 2001) and finally $10.65 (monthly low December 1998).