- Crude oil remains depressed after EIA data.
- WTI eyes June lows, could post lowest daily close since early January.
Crude prices remain in the red on Wednesday’s American session, falling for the third-day in-a-row, following inventory data. Also, risk aversion contributes to the decline.
WTI (futures on Nymex) rose to $52.30 earlier today, but it failed to hold on top of $52.00 and dropped back toward daily lows. As of writing, trades at $51.65, down 3.05%. Risk aversion across financial markets, trade tensions between the US and China, rising inventories and demand concerns continue to weigh on crude oil.
“Energy markets have remain subdued as global growth worries compounded fears of oversupply as US inventories swell. However, we continue to highlight that risks to global supply remain particularly elevated, with Venezuelan production crumbling, Libya in turmoil and Gulf tensions at a boil. And, we suspect that we've hit the strike price on Falih's put, as the fierce decline in energy prices of late heightens the likelihood that OPEC's upcoming meeting will lead to an extension of the supply curtailment agreement, at the very least”, explained analysts at TDS.
They warn that the downside momentum is firming “but given that key trigger levels ($47.50 for WTI) remain out of range for crude prices, we suspect limited activity from the algos for the time being.”
The decline on Wednesday remains limited above $51.50, a key support level. If it consolidates below, more losses seems likely exposing the June low at $50.40 and also the psychological area of $50.00. To the upside, the immediate resistance is now $52.30 followed by $53.00.