The WTI crude oil prices dropped mainly due to falling demand in the wake of intensifying coronavirus fears. The U.S. Crude Oil fell 0.6% to trade at $51.99during the European session.
The crude oil prices recently dropped despite China’s report that the pace of virus infection in the region continued to decrease. It is worth to mention that the Chinese health authorities confirmed 1,886 new cases of coronavirus and 98 further deaths as per yesterday’s report.
China recently imposed tighter restrictions on travel and movement within the country to control the spread of the virus. The International Energy Agency announced this month that the virus could reduce oil demand by 435,000 barrels per day in the first 3-months of the year. In contrast, global experts stated it is yet too immature to announce the outbreak is being controlled.
The equity market risk-tone is getting worse, and U.S. stock futures slipped from record levels after tech giant Apple said on Monday that it would not reach its revenue target of the March quarter, due mainly to slower iPhone production and weaker demand in China, as a side effect of the coronavirus outbreak.
Looking forward, the traders are also awaiting news from the Organization of the Petroleum Exporting Countries and its allies about deepening production cuts to support oil prices.
Daily Support and Resistance
- S1 51.57
- S2 52
- S3 52.28
Pivot Point 52.44
- R1 52.72
- R2 52.88
- R3 53.31
On the technical front, the WTI crude oil prices have violated the ascending triangle pattern on the lower side to trade at 51.45 level. The breakout patterns open further room for selling until 50.50 and 49.45. While the MACD has recently started forming histograms below zero level, which are suggesting odds of more selling in the WTI crude oil prices. In case the WTI crude oil violates 52.30 resistance mark, we may see crude oil prices heading towards 53.50. Good luck!
