WTI: Bears continue to guard $23 mark amid coronavirus crisis
- Downside risks persist amid coronavirus woes led risk-aversion.
- Broad USD bounce adds to the pain in the US oil.
- Eyes on virus updates and US Senate relief bill for fresh impetus.
WTI (oil futures on NYMEX) remains stuck in a $1 tight range so far this Monday, consolidating the recovery from early Asia drop to 20.80 levels.
The further upside attempts remain capped, as sellers continue to lurk above the 23 handle amid a risk-off market profile. The market mood remains dampened by intensifying global recession fears, as the coronavirus outbreak disrupts economic activity amid lockdowns ordered in the affected countries to curb the spread. A global economic slowdown implies lower demand for oil and its products.
On Friday, Giovanni Serio, Head of Research at Vitol, the world’s biggest oil trader, said that Demand is expected to fall by more than 10 million barrels per day (bpd), or about 10% of daily global crude consumption, as cited by Reuters.
Moreover, broad-based US dollar rebound, in light of the increased funding stress, also keeps the bearish momentum intact in the black gold. Meanwhile, from a wider perspective, WTI remains weighed down by the price war between Saudi Arabia and Russia after the fallout of the OPEC+ oil output cut deal.
In the day ahead, the traders will track the broad market sentiment and dollar price-action for fresh trading impetus ahead of the US Senate vote on the virus rescue package bill.
WTI Technical levels to consider