The WTI crude oil prices continue its losing streak mainly due to the worries of the lower demand in China in the wake of coronavirus outbreak fears. As we know, China is the biggest importer in the world.
WTI U.S. West Texas Intermediate (WTI) crude fell for a 4th-week in a row last week after airlines canceled flights to China. Supply chains across the world’s 2nd-largest economy have also been disturbed.
U.S. West Texas Intermediate (WTI) crude fell 24 cents to $51.32 a barrel, after earlier hitting a session low of $50.42. The front-month WTI price fell 15.6% in January, the most significant monthly drop since May.
At the China front, the Fears of coronavirus outbreak have increased stronger during the weekend because the number of affected peoples crossed 14,300, whereas the death losses rose above 300. Apart from the coronavirus, there is another virus that occurred in Hunan that name is H5N1 bird flu virus.
Whereas, the People’s Bank of China (PBoC) has announced to provide 1.2 trillion yuan liquidity to support money markets and ease the sell-off, whereas securities’ regulator said to stop short-selling stocks. Moreover, the authorities have also informed banks to continue to provide loans to those companies affected by the outbreak.
On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) and its allies will likely do the meeting in February instead of in March, to discuss the impact on oil demand from the virus flare-up. Already, OPEC and non-OPEC’s Joint Technical Committee (JTC) have scheduled to meet in early February to assess the impact of the virus.
Daily Support and Resistance
- S3 47.46
- S2 49.74
- S1 50.71
Pivot Point 52.01
- R1 52.99
- R2 54.29
- R3 56.57
The WTI crude oil prices are holding above the double bottom level of 51.04, which is very much likely to get violated considering the ongoing fundamentals in the market. If this happens, the next target for WTI will be 49.05. Let’s wait for a breakout to enter a sell trade today. Good luck!