- Prices of the WTI stay consolidative below the $24.00 mark.
- The EIA reported a 1.6M barrel build during last week.
- Crude oil stays under pressure despite US, Fed stimulus packages.
Prices of the West Texas Intermediate are prolonging the weekly consolidation, navigating the sub-$24.00 region at the time of writing.
WTI looks to supply, demand for direction
The barrel of WTI is adding to Wednesday’s losses in the sub-$24.00 region, as traders keep ignoring the recently announced stimulus measures by the Federal Reserve and the US government.
Instead, the focus of attention in the oil market stays unchanged around the Russia-Saudi Arabia price war (on the supply side) and the predicted significant impact on the oil industry from the coronavirus fallout (on the demand side).
Also collaborating with the sour sentiment around oil, the EIA reported US crude oil inventories went up – albeit less than forecasted – by more than 1.6M barrels during last week and the US oil output ebbed a tad to around 13M barrels.
Moving forward, the next release on the calendar will be Friday’s usual report on the US drilling activity by Baker Hughes.
What to look for around WTI
Crude oil prices remain under heavy pressure in a context of heightened volatility and thin liquidity. As usual in the past weeks, prices of the commodity are hurt by a combination of demand and supply side drivers coming from the ongoing (and future) impact of the coronavirus on the global economy and the unabated Saudi Arabia-Russia price war, aggravated by the palpable possibility that the Kingdom could ramp up production to a record of 12.3Mbpd as soon as in April. A potential relief to this low-prices-scenario could come in the form of a US intervention, which is expected to morph into some sort of agreement between the US, Russia and Saudi Arabia, all aimed to bring in stabilization to the oil market.
WTI significant levels
At the moment the barrel of WTI is retreating 2.39% at $23.41 and a breach of $20.08 (2020 low Mar.18) would expose $17.12 (monthly low November 2001) and finally $10.65 (monthly low December 1998). On the upside, the next resistance aligns at $28.46 (high Mar.20) seconded by $33.70 (21-day SMA) and then $36.28 (high Mar.11).