WTI Crude Oil Dropped to Fresh One-Week Low – Demand Concerns Continue to Soar
Arslan Butt • 2 min read
WTI crude oil prices dropped to the fresh one-week low of $19.92 because the intensifying coronavirus fears continue to hurt the demand for oil. The ongoing price war between Saudia Arabia and Russia continues to weigh on oil prices. At press time, WTI crude oil prices are currently trading at 20.34 and consolidate in the range between 19.92 and 20.91.
Demand for oil is expected to drop 15 million to 20 million barrels per day because more countries are expecting to impose and extend lockdowns to stop the spread of the COVID-19 virus. On the other hand, Saudi Arabia and Russia are not showing any signs of stepping back from increasing supply in the wake of the ongoing price war. As per latest reports, OPEC nations, Saudi Arabia amongst them, are opposed to convening an emergency panel on tanking prices.
The calls of missile hits at the Saudi Arabian capital and North Korea’s recent missile tests did not gain any major attention because the virus fears are stronger than other headlines, which is enough to weigh on the global economy and drag the energy demand. In its latest piece, China’s Caixin increased worries about travel and service freeze while citing downbeat export demand.
As a result, the market’s risk-tone also remains heavy with the US stock futures down nearly 2.0% after US President Donald Trump extends the lockdown and social distancing guidelines till April 30. Moving on, crude oil traders will likely continue to witness further downside due to expectations of demand reduction. Whereas, the market players may await updates on supply restrictions for fresh buying.
Daily Support and Resistance
Pivot Point 22.91
WTI is facing resistance around 20.75, crossing below the pivot point level of 22.91. Closing of candles below this level is exposing oil prices until 20.10, the double bottom support level. Violation of this double top level may lead WTI crude oil prices towards 18.87. The idea today is to stay bearish below 22.91 with a target of 18.87 and a stop loss of over 21.41.