WTI breaks below daily consolidation channel, drops toward $42

WTI came under renewed bearish pressure in American session.
IEA expects a decline of 8.1 million bpd in global oil demand in 2020.
Focus shifts to key macroeconomic data releases from China.

Eren Sengezer FXStreet

Crude oil prices came under renewed selling pressure during the American trading hours and the barrel of West Texas Intermediate (WTI) dropped to a daily low of $42.10. As of writing, the WTI was down 0.7% on a daily basis at $42.23.

Earlier in the day, the International Energy Agency (IEA) in its monthly report announced that it revised down the 2021 crude oil demand estimate by 240,000 barrels per day to 97.1 million barrels per day. The IEA further noted that it sees the global oil demand declining by 8.1 million barrels per day in 2020 due to poor jet fuel demand. "The upsurge in COVID-19 cases has prompted a downgrade of the H2 demand estimate for gasoline," the IEA explained.

Focus shifts to key data from China

Meanwhile, Israel and the United Arab Emirates announced that they have reached a deal to "normalize relations" between those two countries. "As part of the agreement, Israel has agreed to suspend applying sovereignty to areas of the West Bank that it had been discussing annexing," a White House official told reporters. Following this development, easing geopolitical tensions in the Middle East seem to be putting additional weight on crude oil prices.

On Friday, Industrial Production and Retail Sales data from China will be looked upon for fresh impetus. If these figures show that the economic recovery in the world's second oil consumer is picking up pace, the WTI could gain traction and target $43 ahead of the weekend. Later in the day, Baker Hughes Energy Services will release its weekly US Oil Rig Count data.

Technical levels to watch for

WTI

Overview
Today last price	42.51
Today Daily Change	-0.29
Today Daily Change %	-0.68
Today daily open	42.8

Trends
Daily SMA20	41.47
Daily SMA50	40.15
Daily SMA100	33.35
Daily SMA200	43.11

Levels
Previous Daily High	43.13
Previous Daily Low	41.76
Previous Weekly High	43.62
Previous Weekly Low	39.75
Previous Monthly High	42.52
Previous Monthly Low	38.73
Daily Fibonacci 38.2%	42.6
Daily Fibonacci 61.8%	42.28
Daily Pivot Point S1	41.99
Daily Pivot Point S2	41.19
Daily Pivot Point S3	40.62
Daily Pivot Point R1	43.36
Daily Pivot Point R2	43.93
Daily Pivot Point R3	44.73

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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