WTI Crude Oil Edges Higher as Prices Near Key Support Level
Arslan Butt • 1 min read
Early on Tuesday, WTI crude oil prices are showing a slight improvement after falling more than 3.5% in the previous session over mounting fears of the spread of the coronavirus across several countries. At the time of writing, WTI crude oil is trading at around $51.55 per barrel.
However, the improvement in oil prices was driven by profit taking after WTI crude oil declined close to a key support level of $50 per barrel. Monday was a black day for equity markets in the US and Europe after the experience the steepest decline seen since 2016 over worries that the coronavirus could turn into a global pandemic.
The WHO attempted to reassure markets, maintaining that it was too early to call this a global pandemic and expressing hopes that it could still be contained. As cases mount outside China, markets fear that the virus could have a significant impact on global supply chains as well as the global economy in addition to affecting China’s economy.
Any slowdown in economic growth can reduce the demand for crude oil in markets, causing oil prices to trade weak lately. A recent Reuters poll expects crude inventories in the US to have increased for the fifth consecutive week during the last week, causing additional weakness in WTI prices.