WTI drops back towards $22 mark, as coronavirus fears spark risk-off
- WTI shaves-off gains and drops back towards $22 levels.
- Hopes of a new enlarged-OPEC deal roiled by coronavirus-led risk-off.
- DXY rebound also adds to the pain in WTI ahead of House vote, Rigs data
Having failed another attempt to sustain the recovery gains above the 23 level, WTI (oil futures on NYMEX) sellers returned and knocked-off the rates back to test Thursday’s low of 22.38. At the time of writing, the black gold trades at 22.57, down 0.20% so far, with eyes set on the 22 mark.
Oil bulls are unable to take advantage of the increased hopes of a new OPEC deal being considered by Russia, as risk-aversion rears its ugly head in Europe amid mounting fears over the coronavirus rapid spread and its economic fallout.
Earlier today, Dmitriev, Head of the Russian Direct Investment Fund (RDIF), called for a new OPEC alliance (OPEC+) deal to stabilize the oil market and cushion the demand impact of the coronavirus outbreak.
However, the market sentiment was roiled by a 17k surge in virus cases in the US on Thursday, as the US overtook China as the nation with the most infections. The optimism fueled by the US fiscal stimulus was washed away by the intensifying virus spread globally.
Also, increased haven demand for the greenback amid risk-off collaborated with the latest leg down in barrel from WTI from near the 23 handle.
Attention now turns towards the US House vote on the coronavirus relief package and Baker Hughes Oil Rigs Count data for fresh trading impetus while virus-related updates will continue to remain a major driver on the market sentiment.
WTI technical levels to consider