- WTI seesaws around the 13-month low.
- Coronavirus-led likely reduction in demand keeps weighing on the energy prices.
- Geopolitical tension between Turkey and Syria, Saudi Arabia’s push for production cut offers intermediate pullbacks.
WTI bears dominate near $46.60, down 0.30%, during the early trading session on Friday. The black gold dropped to the lowest since early-January 2019 the previous day amid fears that coronavirus (COVID-19) will weigh on the global energy demand. However, the escalation of Turkey-Syria tension and Saudi Arabia’s push for more production cuts are likely to offer the latest pullback moves.
Coronavirus has been the key pandemic weighing over the global trading sentiment off-late. The increase in cases from South Korea and Italy were the initial triggers while the latest first-ones in the list, including the US, propelled the risk-off afterward.
Recently, the Bank of America/Merrill Lynch revises down the global growth forecast to 2.8% for 2020, the weakest since 2009.
This could be read in conjunction with the Reuters report stating Saudi Arabia’s likely reduction in oil exports to China, by nearly 5,00,000 barrels per day (bpd) in March, due to the slump in refinery demand. That said, Financial Times (FT) recently came out with the news that the kingdom is pushing hard for a production cut of additional one million bpd to be agreed during the next week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia mostly known as OPEC+.
Elsewhere, geopolitical tension between Syria and Turkey gets stiff after the Syrian army killed nearly 29 Turkish troops. News recently crossed wires that the US stands by its NATO ally Turkey.
Amid all these catalysts, the US 10-year treasury yields decline two basis points (bps) to 1.277% whereas Japan’s NIKKEI drop 2.76% to 21,336 by the press time.
Oil traders will now keep eyes on the Coronavirus updates for near-term direction while the US Baker Hughes Rig Counts, prior 679, can also offer intermediate moves.
Technical Analysis
A sustained downside below the recent bottom of surrounding $45.95 can fetch the energy benchmark towards $44.50 ahead of highlighting 2018 low close to $42.00.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD falls below 1.1100 after EU inflation data
EUR/USD remains under heavy bearish pressure and falls below 1.1100 in the European session on Tuesday. The data from the Eurozone showed that the annual HICP inflation softened to 1.8% in September from 2.2%, weighing on the Euro.
GBP/USD extends losses toward 1.3300 ahead of US data
GBP/USD extends losses toward 1.3300 in the European trading hours on Tuesday. Fed Chair Powell's less dovish remarks and a cautious mood keep the US Dollar underpinned ahead of US ISM Manufacturing PMI, JOLTS Job Openings and Fedsepak.
Gold recovers on geopolitical risks but upside capped by Powell
Gold recovers marginally to trade in the $2,640s per troy ounce on Tuesday after the Israeli army mounts a ground invasion of Lebanon, stoking geopolitical tensions and increasing safe-haven demand for Gold. This, and the fading effect of China’s stimulus program combine to help the yellow metal recover after two consecutive days of losses.
US JOLTS Preview: Job openings set to stay below 8 million for third consecutive month in August
The US JOLTS data will be watched closely by investors ahead of the September employment report. Job openings are forecast to stay below 8 million for the third consecutive month in August.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.