WTI cuts a portion of intraday losses, shedding 1.5% on the day

• Concerns about rising COVID-19 cases weighed heavily on crude oil.
• Wednesday’s bullish EIA forecast, US supply data did little to support.

Crude oil WTI It reversed an initial drop in the North American session to levels below $ 64.00 and was last seen trading in the $ 64.60-70 region, down almost 1.5% on the day.

The commodity witnessed a strong sell-off on Thursday and extended the previous day’s retracement slide from near the eight-week high, around the $ 66.60-70 region touched earlier this month. The continued rise in new COVID-19 cases in India continued to fuel concerns about the recovery in fuel demand. This, in turn, overshadowed the optimism led by the International Energy Agency (EIA) report on Wednesday and acted as a headwind for black gold.

In its monthly report released Wednesday, the EIA noted that demand for crude is outpacing supply and that the discrepancy will widen further. This comes after OPEC’s report earlier this week pointed to a strong recovery in fuel demand in 2021 amid strong economic recovery in the United States and China. Traders even ignored Wednesday’s bullish bid data from the US EIA, which showed a much smaller-than-anticipated draw of 427,000 barrels for the week ending May 7.

With Thursday’s slide, commodities have turned lower for the week. Some subsequent selling below $ 64.00, leading WTI towards weekly swing lows around the $ 63.70 region will be seen as a further trigger for bearish traders. This, in turn, will set the stage for further losses and drag spot prices even further towards test levels below $ 63.00 / barrel.

Technical levels