fxs_header_sponsor_anchor

News

WTI extends losses below $80.00 on buoyant US Dollar, China’s Covid woes

  • China’s coronavirus crisis weighs on WTI price, on speculations of lower demand.
  • The Eurozone threatening to impose a cap on Rusian and a buoyant US Dollar keeps WTI defensive.
  • WTI Price Analysis: A daily close below $80.00 could pave the way for a YTD low re-test.

Western Texas Intermediate (WTI), the US crude oil benchmark, remains moderately negative due to low demand concerns surrounding the crude oil market. Factors like ongoing China’s Covid-19 outbreak and reports emerging during the week for increased crude output keep the WTI price stable. At the time of writing, WTI exchanges hands around $77.46 PB

Investors’ sentiment is mixed, in part spurred by thin liquidity conditions amid a shortened week due to the US Thanksgiving holiday. Additionally, China’s registering high number of Covid-19 cases would dent demand for the black gold, weighed on WTI price.

Newswires reported that cases peaked around 31,987 on Thursday, up from Wednesday’s 29,754. At the beginning of the week, Chinese authorities revealed measures to relax Covid-19, aiming to be less restrictive. Still, officials in some cities are again reimposing stricter measures and ordering lockdowns as they scramble to suppress the virus.

Aside from this, reports that the European Union continues its discussions to impose a price cap to Russian oil, between $65 to $70 per barrel, depressed oil prices.

Additionally, the US Dollar (USD) appreciated Friday as some short covering speculation surrounded the market. The US Dollar Index (DXY), a gauge of the greenback’s value against a basket of six peers, climbs 0.36%, up at 106.000.

WTI Price Analysis: Technical outlook

After reaching a weekly high of $82.35 PB on Tuesday, WTI prolonged its losses throughout the week. Of note, WTI falling below $80.00 PB opened the door for further downside and might test the November 21 low of $75.30 if some fundamental reasons increased uncertainty about oil demand. Notably, the Relative Strength Index (RSI) continues to fall further, meaning that sellers are gathering momentum.

Therefore, WTI’s path of least resistance is downwards. WTI’s first support would be $77.00. Break below will expose the November 21 low of $75.30, which, once cleared, could send the WTI price tumbling toward its YTD low of $74.30.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.