WTI Crude Oil Recovers Slightly, But Under Pressure Due to Falling Demand
WTI crude oil prices are climbing higher early on Wednesday after three consecutive days of losses as investors short their positions for profit taking even though coronavirus continues to remain in focus. At the time of writing, WTI crude oil is trading at around $50.26 per barrel.
Despite these moderate gains, WTI crude oil has lost around 7% of its value since last Thursday over mounting fears that the coronavirus outbreak could turn into a global global pandemic after more cases get reported internationally. The profit taking happened as crude oil prices dropped towards the $50 key support level in the past few sessions.
However, crude oil prices remain supported over expectations of reduced supply due to the ongoing crisis in Libya even as markets await OPEC and its allies’ decision on curbing crude production to offset the weakness in demand due to the outbreak. OPEC and allies are scheduled to meet in Vienna on March 5-6 when they could officially announce additional supply cuts in the wake of falling demand due to the virus.
After downgrading oil demand growth forecasts for this year, the IEA has cautioned that there could be further reduction in oil demand as long as the virus keeps spreading worldwide. In keeping with the IEA’s estimates, crude inventories in the US climbed 1.3 million barrels higher during the previous week, according to the latest API report.
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