Oil: WTI falls back after IEA fragility outlook, remains in the $40 zone

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  • Dollar and markets with lateral movements favor low volatility in oil.
  • WTI loses steam and fails to assert itself over $ 40.

He Oil price is falling less than 1% on Wednesday, after the International Energy Agency (EIA for its acronym in English) warned that the outlook in the market remains “fragile”, affected by the pandemic.

WTI is trading in the $ 40.00 zone, after rising to $ 40.33 and subsequently bottoming at $ 39.80, with a slight bearish bias. The EIA report together with the dollar’s lateral movements keeps any rebound in oil limited.

He dollar index (DXY) is trading virtually unchanged on Wednesday at the 93.50 area, validating much of the weekly gains. The bags are with mixed results.

The IEA warned that a resurgence of the pandemic may delay oil price recovery. Another detail is the limitation to act of the Organization of Petroleum Exporting Countries and its allies.

The drop in WTI was modest after the monthly EIA report for 2020 and 2021, since the demand estimate did not change significantly, but risks were added.

From a technical standpoint, the WTI could gain momentum in the near term by consolidating above the 20 SMA on the four-hour chart which is passing $ 40.15. In a broader perspective, strong resistance is at $ 41.45, where it is the highs of the second half of September and this month. To the downside, at $ 39.80 is immediate support and then $ 39.00 will follow.

Credits: Forex Street

 

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