During Thursday early Asian trading session, WTI crude oil failed to stop its previous day losing streak and dropped to $37.68 from the 38.63 mainly after the US Energy Information Administration (EIA) showed a higher than expected rise in stockpile figures which suggested weaker demand in the global market and exerted some downside pressure on oil prices. The second wave of coronavirus (COVID-19) triggering by the intensifying cases in several countries also kept crude oil prices under pressure. At press time, WTI crude oil is currently trading at 37.62 and consolidating in the range between 37.12 and 37.77.

US crude (CLc1) futures fell 2.1%, or 80 cents, to $37.16 a barrel at 0138 GMT, adding to a loss of 42 cents on Wednesday. At the data front, the commercial crude oil inventories in the United States in the week ending June 12 showed a rise of 1.2 million barrels against the market expectation for a decrease of 0.15 million barrels per the latest EIA update. Let me remind you, the private inventory data published by the American Petroleum Institute (API) also showed a rise of 3.9 million barrels in the week to June 12 to 543.2 million barrels against expectations for a draw of 152K barrels earlier during the week.

Despite the promising result of the UK’s second phase of vaccine trials and ongoing use of steroids called dexamethasone, several countries failed to stop the second wave of coronavirus, especially the US, China, and Japan. Texas showed a record high jump in hospitalizations, likewise Florida, Arizona, and Oklahoma also showing further cases. Apart from this, Japan’s virus figures rose to the highest since May 30. Whereas the Dragon Nation is using all the possible ways, including renewed lockdown restriction to stop the deadly disease from spreading. As a result, investors are losing their confidence about V-shape recovery, which eventually weighed on oil prices.

However, the risk-off market sentiment was further bolstered by the geopolitical tensions between North and South Korea, as well as between India and China, which also exerted some burden on energy prices. As a result, the market’s risk-tone remained sluggish with Wall Street benchmarks closing Wednesday on the negative side with the 10-year US Treasury yields dropping to 0.73%. Moreover, S&P 500 Futures also registered losses near 3,100 by the press time.

The bearish sentiment around crude oil prices could also be attributed to the OPEC and OPEC+ Joint Ministerial Monitoring Committee (JMMC) meeting that showed no progress. Looking forward, the traders will keep their eyes on the qualitative catalysts for near-term direction. In the meantime, the virus headlines and geopolitical headlines will be key to watch.

Daily Support and Resistance

S1 35.22

S2 36.69

S3 37.33

Pivot Point 38.16

R1 38.8

R2 39.63

R3 41.1

On Thursday, WTI crude oil is gaining support above 37.15 level. Above this level, WTI has odds of bullish trend continuation, which can lead prices higher until 39.35 level. While the bearish breakout of 37.2 levels can extend to selling until 36.63 level, on the lower side, violation of 36.65 can cause a drop until 34.63 today.

Good luck!